South African startup Lulalend, an online automated provider of short-term funding for small and medium enterprises (SMEs), has raised Series A funding of US$6.5 million to help it scale.
Founded in 2014 by Trevor Gosling and Neil Welman, Lulalend utilises proprietary credit scoring technology to enable it to provide quick decisions, fast funding, and transparent pricing to SMEs.
The startup last raised funding in 2016, and has now taken on US$6.5 million in investment in a round co-led by IFC and Quona Capital, with participation from existing investors Accion Venture Lab and Newid Capital. The new funding will help Lulalend scale in response to South Africa’s significant funding gap for small businesses.
“69 per cent of small and medium-sized businesses in South Africa say that access to working capital would help their businesses grow,” said Trevor Gosling, co-founder and chief executive officer (CEO) of Lulalend.
“Yet for years in South Africa there’s been a massive funding gap for small-and medium enterprises, the very lifeblood of the economy. This fundraise from Quona Capital, a leading VC globally in emerging markets fintech, and IFC, a member of the World Bank Group, provides us with the growth capital and support we need to scale and drive exciting partnerships.”
Johan Bosini, Quona Capital partner, said his company had been excited about Lulalend from the very earliest stage.
“Lulalend has built a seamless user experience that solves a massive funding gap faced by so many SMEs in South Africa – enabling SMEs to grow and thrive, rather than getting stuck due to lack of working capital. We’re happy to partner with the IFC to fund this growing company,” he said.
The partnership with Lulalend is part of IFC’s programme to deepen small business development and promote access to finance to improve economic inclusion and create job opportunities.
“Small business lending is changing, and by partnering with digital innovators like Lulalend we can capitalise on new sources of data and models to deliver finance to reach more small businesses in South Africa, thus driving job creation and economic growth,” said Kevin Njiraini, IFC’s regional director for Southern Africa and Nigeria.