Lulalend, a South African digital lender catering to SMEs, has finalised a $35 million Series B funding round.
The round was led by Lightrock and saw participation grom DEG, Triodos Investment Management, Quona Capital and the International Finance Corporation.
The company’s digital-first approach, paired with its credit scoring algorithm, has enabled it to offer a faster, simpler, and more transparent service for SMEs to access business funding.
By leveraging data from a diverse set of alternative sources, which support quicker and more accurate assessments of business health, Lulalend can review applications and distribute funds in hours as opposed to the weeks or months it takes traditional lenders.
Founded in 2014, Lulalend’s customer offering has recently grown to encompass a neo-banking proposition named Lula, built in partnership with Access Bank. Offering a bank account specifically tailored for SMEs, an AI-driven cash flow management tool and real-time access to funding via the existing Lulalend funding solutions, Lula promises to simplify money management for the more than 2 million formal and informal SMEs that exist in South Africa.
Lulalend will use the funding to scale its business and address South Africa’s enduring SME credit gap, which is estimated to be valued at more than $20bn per year.
The capital raised will enable Lulalend to increase the size of its loan book, bring new solutions to market, and invest in the technology and talent that will accelerate the rollout of the company’s new digital business banking proposition.
Lulalend co-founder and CEO Trevor Gosling said, “We remain grateful to our new and existing investors, who are committed to our mission of driving financial inclusion and catalysing growth in South Africa’s critical SME sector, which accounts for almost 40 percent of our GDP and 60 percent of private sector employment. With their combined support, we will scale our business and bring new products to market to better meet the financing needs of South Africa’s SMMEs.”
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