South Africa’s Lulalend raises $34m in funding to launch banking product

Lulalend, a South African digital lender startup that provides varied loans to underserved small and medium-sized businesses, has raised $35 million in Series B funding to launch it banking products.

An international impact investor, Lightrock, led the investment round. It also had the participation of some new investors, including the German development finance institution DEG, Triodos Investment Management and Women’s World Banking—alongside lead investors from its $6.5 million Series A round: The International Finance Corporation (IFC) and Quona Capital.  

The funding will help the digital lending company, Lulalend increase its loan book size, expand its new product across other markets and invest in the technology and talent to accelerate the rollout of the company’s new digital business banking platform.

Speaking on the plans for the new funding raised, Trevor Gosling, the CEO of Lulalend, said,

Much of this funding goes to the digital bank’s rollout, including marketing. And then to bolster our balance sheet, strengthen our balance sheet; with the $35 million raised, we can raise over $200 million in debt and bring it on our balance sheet to fund our markets.

Through the funding, Lulalend plans to improve its services per the traditional lenders’ policy massively.

Trevor Gosling explains that the launching is committed to introducing customers to feasible opportunities associated with financial services formed during the pandemic, even though fintechs are known to set out with unbundling financial services for distinctiveness from banks through the process of rearrangement with models similar to banks in their developmental stage.

Gosling co-founded the startup with Neil Welman and told TechCrunch over a call.

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.

Read More; SA Fintech Startup Lulalend Closes $6.5M Series A Fund To Help SMEs Access Quick Loans

Lulalend’s successes

In 2014, Lulalend was founded as the first online automated business funding provider, using proprietary AI technology to simplify cash flow management for business owners. While others like Neil Welman (CTO), Alexander Schuetz, IFC, Quona, Hallman Holding International, Accion, Team Africa Ventures, Newid Capital, Lutz Seebacher, and its Employees are its shareholders.

It is legally registered as a South African SME Finance Association member. Over the past three years, Lulalend improvised credit solutions to its partners such as telecom operator Vodacom, fintech Yoco and e-commerce giant. It also participates in a credit distribution strategy that seems to have had some success.

According to Gosling, what differentiates Lulalend from others is its speed and achievement in disbursing loans and opening a bank account through constant support services to its clients. He made his remark statement by saying

 

It has disbursed billions of rand to small businesses across South Africa, the company said in a statement. 

Since Lulalend launched in 2014, it has raised $35 million in a Series B round led by international impact investor Lightrock, with commitments from new investors like: German development finance institution DEG, Triodos Investment Management and Women’s World Banking, alongside with lead investors from its $6.5 million Series A round: The International Finance Corporation (IFC) and Quona Capital.