*CORRECTION - Para 2 is corrected to reflect that Minted has not received a licence from the Financial Conduct Authority but that its application for an electronic money licence is pending approval.
LONDON - Minted, a UK-based gold trading platform, is preparing its launch this summer.
Minted's application for a licence from the UK's Financial Conduct Authority (FCA) is pending approval.
Minted launched the beta version of its platform at the beginning of May. The start-up plans to fully launch its web-based platform in mid-June and then the mobile app by the end of July, according to Shahad Ahmed, one of the start-up’s co-founders.
He explained that there are two ways to buy gold physically either in monthly instalments or a one-off payment.
Minted buys physical gold from a number of refineries, both in the UK and Nadir Gold in Istanbul, both of which are on the London Bullion Market Association’s (LBMA) good delivery list of partners.
“A range could be that we buy from Spot Price plus 1% up to 4%, depending on the market circumstances of supply and demand,” said Ahmed.
Minted then stores gold in an independent bank-grade vault facility based in Mayfair, London.
“We also safeguard customer gold through a corporate trustee arrangement with London-based accountancy firm, More Group,” Ahmed said.
“To add further reassurance, Alliot’s of London performs an independent custody audit on a quarterly basis to ensure that vault holdings match up with customer holdings.”
Ahmed said that Minted can also send the physical gold to any verified address in the UK upon the request of the customer.
Minted offers 12 months free insurance to users, after which they will charge from £1 per month.
To solidify their Shariah credentials, Ahmed highlighted that Minted’s Shariah-compliance is based on AAOIFI’s guidance on gold.
Established over a year ago, Minted has three founders who hold equal ownership of the business. In addition to the three, the start-up has an internal legal team. The entire team is made up of 15 members, including the tech personnel based in Istanbul.
The company raised a pre-seed round of £500,000 via a corporate investor, AE Invest, that specialises in finance, technology and precious metals.
To date, Minted has 200 clients made up of individuals, and so far £150,000 worth of transactions have been conducted on the platform, according to Ahmed.
It aims to have 10,000 users by the end of the year.
UNIVERSAL BRAND APPEAL
Ahmed argues that gold has performed well over the past five years.
“Gold is not seen as attractive by a lot of the traditional financial community like banks because it takes money out of the economy,” he said.
He noted that while the short-term volatility of gold can be manipulated, in the long-term gold is universally accepted, and it has an intrinsic value.
The choice of the start-up’s name, Minted, is the British slang word to be rich, and also refers to gold as being minted into coins or bars.
“Our brand has been positioned to be applicable to all people as gold is a universal commodity,” Ahmed said.
“However we also realise that the Muslim market is currently underserved when it comes to investment products and we feel our proposition at Minted is a fantastic low-entry, Shariah-compliant proposition for Muslims to invest in a commodity they are familiar with.”
EXPANDING PRODUCT PORTFOLIO
As the COVID-19 restriction measures continue, Minted will focus on digital marketing and brand development for the next 6 months.
Ahmed said the company may consider outdoor advertising next month, with an emphasis on geographic focusing on the UK.
In addition to the gold trading platform, Minted is developing an auto-investing plan similar to that of saving and investment app MoneyBox, noted Ahmed.
It also plans to launch a digital challenger bank in the first quarter of 2021. This will offer products like gold and silver and other precious metals.
“I would not say we would be an Islamic challenger bank, more so, a challenger bank with ethical investment products which are also Shariah-compliant,” he said.
The start-up also plans to offer a debit card around the beginning of next year.
FUNDING, GEOGRAPHIC AMBITIONS
Ahmed said the company aims to break even in about a year. “We aim to eventually become a unicorn of ethical investments,” he said.
The company will also look to raise funding to continue its growth.
“We would be looking to raise around £1 million, and mostly to be put towards customer acquisition, growing the team and banking side and growth into other territories,” he said.
As well as funding, Minted has plans to enter other markets over the next few years.
“We aim to enter Germany and France at the end of next year, depending on the Brexit negotiations and if passporting will still be available,” he said.
“We are also looking at entering the U.S. and Turkey, along with Africa and South Asia through strategic local partners.”
(Reporting by Hassan Jivraj; Editing by Emmy Abdul Alim [email protected])
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