Lulalend will use the capital to scale its business and address South Africa’s enduring SME credit gap, which is estimated to be valued at more than $20 billion per year, according to the International Finance Corporation.

Lulalend’s $35 million (R600 million) Series B funding round was led by Lightrock, the global impact investor, with participation from new investors the German development finance institution DEG, Triodos Investment Management, and Women's World Banking Asset Management, along with existing investors The International Finance Corporation (IFC) and Quona Capital.

The Company’s digital-first approach, paired with its proprietary 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. To date, Lulalend has disbursed billions of Rand to SMEs across South Africa.

Founded in 2014 as South Africa’s first online provider of funding for SMEs, 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.

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. In addition, in partnership with newinvestor Women’s World Banking Asset Management, the company will work to scale its product to women-owned SMEs in the region.

Trevor Gosling, co-founder and CEO of Lulalend, says: “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.”

Arul Thomas, Principal at Lightrock, says: “Traditional lenders have historically underserved the SME market, unfairly hindering the growth of companies that make up the backbone of South Africa’s economy. We are delighted to be partnering with Trevor and his dedicated team, who are levelling the playing field for SMEs with their simple, fast, and transparent approach to business finance.”

Royal Park Partners, the specialist fintech corporate advisory firm, acted as the exclusive financial and strategic advisor to Lulalend and its shareholders throughout the transaction.