Ayan Capital Raises £2.8M to Make EV Finance Accessible on Islamic Finance Principles
October 10, 2024
Ayan Capital, a London-based fintech company, has raised £2.8 million from Cur8 Capital and other investors to scale its Sharia-compliant vehicle financing platform. The company provides financing for the purchase of electric and hybrid vehicles structured according to Islamic finance principles — specifically avoiding the riba (interest) that makes conventional car finance products inaccessible or unacceptable to observant Muslim consumers. At the time of the raise, the EV finance gap for Islamic finance users was almost entirely unserved by the UK's mainstream financial institutions.
The UK has an estimated Muslim population of approximately 3.9 million people — around six percent of the total population — and Islamic finance principles are observed by a significant proportion of this community. Conventional car finance in the UK almost universally operates through hire purchase or personal contract purchase agreements that charge interest on the outstanding balance, making them incompatible with Islamic finance requirements. While some Islamic mortgage products exist in the UK, the vehicle finance market has had very limited Sharia-compliant provision, forcing observant Muslims to either pay for vehicles in full, access more expensive informal lending, or compromise on their principles to access standard products.
Ayan Capital addresses this by structuring its vehicle finance products using the murabaha model — a cost-plus-profit arrangement in which the finance provider purchases the vehicle and sells it to the customer at a disclosed markup, payable in instalments. This structure provides the customer with access to the vehicle immediately while making transparent, pre-agreed payments, without any interest element. The focus on electric and hybrid vehicles aligns Ayan's offering with the direction of travel in the UK automotive market, where salary sacrifice schemes and government incentives have made EV leasing and purchasing an increasingly attractive option for employed professionals.
Cur8 Capital, a London-based venture firm with a specific focus on the Muslim consumer and Islamic economy, is a natural lead investor for Ayan's round, having previously backed algbra (the Sharia-compliant digital bank) and other companies serving underbanked or underserved communities within the UK Muslim demographic. The funding will be used to build out Ayan's product and underwriting infrastructure, develop its distribution partnerships with EV dealers and fleet operators, and scale its customer base across the UK.
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