Cape Town-based fintech startup Lulalend has raised US$6.5 million in its Series A round of funding. The Series A round was led by Quona Capital, a venture capital firm that invests in growth-stage financial technology companies and International Finance Corporation (IFC), a private equity and venture capital subsidiary focused on the private sector.
Lulalend, a digital lender that operates using an online automated provider for short term funding of small and medium enterprises (SMEs). The startup helps SMEs that are unable to obtain working capital.
Established in 2014 by Trevor Gosling and Neil Welman, Lulalend utilises proprietary credit scoring technology to enable it provide fast funding and transparent return rates.
“The biggest thing is strengthening our balance sheet so we can access traditional debt funding to grow our loan book,”Gosling told TechCrunch in a call.
Lulalend’s newly raised funds is a welcome boost as the startup last raised funding in 2016.
Quona Capital partner Johan Bosini noted that SMEs, which he called the very lifeblood of the economy in South Africa, have had a hard time accessing funding. And the money made available to Lulalend is meant to help it scale effectively in response to South Africa’s significant funding gap.
According to Kevin Njiraini regional director of IFC’s for Southern Africa and Nigeria, small business lending is changing. Capitalising on new sources of data and models that drive job creation and economic growth informed the IFC’s decision to partner with a digital innovator like Lulalend.
Lulalend is poised to provide access to finance for a great number of SMEs and in turn improve economic growth and create job opportunities.
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