It is dedicated to the funky music of the Arab world of the 1970s. It was co-founded by Jannis Stürtz, who also works as a DJ using the name Habibi Funk. The label is mostly known for its albums and accompanying booklets of Arabic funk and soul bands from the 1960-80s.

Jannis Stürtz stresses the political aspects of the label's work, addressing ‘the context of post-colonialism’ and avoiding orientalist ‘stereotypical visual language’. He also added that Habibi Funk Records licenses the music it reissues directly from the artists or their families, who get a 50% cut of the profits. In an interview with The Vinyl Factory, Stürtz commented: ‘If you’re a European or Western label and you’re dealing with non-European artists’ music, there’s obviously a special responsibility to make sure you don’t reproduce historic economic patterns of exploitation, which is the number one thing when it comes to the post-colonial aspect of what we are doing.’