Lulalend, a pioneering South African digital lender dedicated to serving underserved small and medium-sized businesses (SMEs), has successfully closed a Series B funding round, securing $35 million. This significant investment, led by international impact investor Lightrock, marks a pivotal moment for the company as it prepares to launch its comprehensive suite of digital banking products. The round also saw participation from new investors, including the German development finance institution DEG, Triodos Investment Management, and Women’s World Banking, alongside continued support from lead investors of its previous $6.5 million Series A round: The International Finance Corporation (IFC) and Quona Capital.

The newly acquired capital is earmarked for several strategic initiatives crucial to Lulalend’s expansion. A substantial portion will be directed towards bolstering the company’s balance sheet, enabling it to leverage the $35 million to raise over $200 million in debt, which will in turn fund its market activities. Furthermore, the funding will facilitate the expansion of Lulalend’s new products into additional markets, increase its loan book size, and support significant investments in technology and talent to accelerate the rollout of its innovative digital business banking platform.

Trevor Gosling, CEO of Lulalend and co-founder with Neil Welman, emphasized the strategic shift in the company’s mission. He stated that while fintechs traditionally unbundle financial services to differentiate from banks, Lulalend is committed to introducing customers to feasible opportunities in financial services, evolving towards models akin to traditional banks in their developmental stage. Gosling elaborated that extensive engagement with customers revealed that access to credit, though vital, is just one aspect of their needs. “We had more time to think about how to engage with our customers and understand their needs and problems and eventually realized that access to credit is just one of the big parts we can be doing for our businesses. So we went down the road of building our digital bank. Also, we know businesses need cash flow management and so we’ve broadened our horizon from just access to funding to how we solve end-to-end cash flow,” Gosling explained.

Founded in 2014, Lulalend established itself as South Africa's first online automated business funding provider, leveraging proprietary AI technology to streamline cash flow management for business owners. Its robust shareholder base includes Neil Welman (CTO), Alexander Schuetz, IFC, Quona, Hallman Holding International, Accion, Team Africa Ventures, Newid Capital, Lutz Seebacher, and its employees. The company is also a legally registered member of the South African SME Finance Association.

Over the past three years, Lulalend has demonstrated impressive success by improvising credit solutions for key partners such as telecom operator Vodacom, fintech firm Yoco, and various e-commerce giants. It has also successfully implemented a credit distribution strategy. Gosling highlights Lulalend’s speed and efficiency in loan disbursement and bank account opening, complemented by consistent support services, as key differentiators. The company has proudly announced the disbursement of billions of rand to small businesses across South Africa, underscoring its significant impact on the SME sector since its inception.