SME digital lender Lulalend secures $35m in funding

Lulalend, the Cape Town-headquartered digital lender for small and medium-sized enterprises (SMEs), has secured $35m (R607m) in growth capital after finalising a series B funding round.

The funding, to be used to scale Lulalend’s business, was secured from global impact investor Lightrock with additional participation from German development finance institution DEG, Triodos Investment Management, Women’s World Banking Asset Management as well as existing investors the International Finance Corporation (IFC) and Quona Capital.

“We remain grateful to our new and existing investors, who are committed to our mission of driving financial inclusion and catalysing growth in SA’s critical SME sector, which accounts for almost 40% of our GDP and 60% of private-sector employment,” said Trevor Gosling, co-founder and CEO of Lulalend.

“With their combined support, we will scale our business and bring new products to market to better meet the financing needs of SA’s SMEs.”

Founded in 2014 as SA’s first online provider of funding for SA’s more than 2-million formal and informal SMEs, Lulalend has recently expanded its offering with a banking proposition specifically tailored for small businesses. Dubbed Lula, the neo-bank offering which was built in partnership with Access Bank, provides SMEs with a bank account as well as an AIdriven cash flow management tool and real-time funding.

Its digital-first approach, paired with its proprietary credit-scoring algorithm, has enabled it to offer a faster, simpler and more transparent service for SMEs seeking funding. Its data-driven approach allows it to assess SME borrowers quickly and accurately, reducing the time it takes to review credit applications and disburse funds in hours rather than days or weeks.

“Traditional lenders have historically underserved the SME market, unfairly hindering the growth of companies that make up the backbone of SA’s economy,” said Arul Thomas, principal at Lightrock.

“We are delighted to be partnering with Trevor and his dedicated team, who are levelling the playing field for SMEs with their simple, fast, and transparent approach to business finance.”

Royal Park Partners, the specialist fintech corporate advisory firm, acted as the exclusive financial and strategic adviser to Lulalend and its shareholders throughout the transaction.

WE WILL SCALE OUR BUSINESS AND BRING NEW PRODUCTS TO MARKET TO BETTER MEET THE FINANCING NEEDS OF SA’S SMES