Lulalend, a South African-based digital lender that serves underrepresented small and medium-sized firms (SMEs), has closed a $35 million (R600 million) Series B fundraising round.

Lulalend will use the funds to expand its operations and solve South Africa’s persistent SME credit gap, which is estimated to be worth more than $20 billion per year by the International Finance Corporation.

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

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The funds raised will allow Lulalend to expand its loan book, launch new products, and invest in technology and personnel to expedite the development of the company’s new digital business banking proposition. In addition, the company will work with new investor Women’s World Banking Asset Management to scale its offering 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.”

A Look At What The Startup Does

Lulalend, South Africa’s first online source of funding for SMEs, was founded in 2014, and its client offering has recently expanded to include a neo-banking proposition called Lula, developed in collaboration with Access Bank. Lula promises to ease money management for South Africa’s more than 2 million formal and informal SMEs by providing a bank account specifically customised for SMEs, an AI-driven cash flow management tool, and real-time access to funding via the existing Lulalend funding options.

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The Company’s digital-first approach, along with its patented credit scoring system, has enabled it to provide SMEs with a faster, simpler, and more transparent solution for obtaining business capital. Lulalend can examine applications and release funds in hours rather than the weeks or months that traditional lenders require by integrating data from a diversified variety of alternative sources that facilitate faster and more accurate assessments of business health. Lulalend has distributed billions of Rand to South African SMEs to date.

Lulalend lender

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. 
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard

Symbiotics Investments has arranged the first USD 4.7 million Social Bond for Lulalend.

Lulalend, founded in 2015, fills the funding gap in South Africa for social and medium-sized enterprises (“SME”) by providing them with quick and customised access to finance. Lulalend offers a selection of suitably adaptable finance packages, that fit the needs of its clients. With the issuing of this Social Bond, Lulalend displays its ability to align with the internationally acknowledged Foreign Capital Market Association Social Bond Principles “ICMA SBP”, improving the interest of international financiers.

“We are thrilled to issue this first Social Bond for Lulalend in South Africa. By supporting Lulalend, a leading actor in the SME lending in South Africa, Symbiotics Investments fosters employment generation in the country, alleviating unemployment and promoting sustainable development.”, said Duncan Frayne, Symbiotics Investments Regional Director, Sub-Saharan Africa.

“At Lulalend our mission is to empower every SME in South Africa to succeed. By doing so we’ll help accelerate economic and social development for all South Africans. This Social Bond from our long term partner — Symbiotics Investments — will enable us to provide more working capital to more small businesses, which is essential for their growth and ultimate success.”, stated Trevor Gosling, Lulalend CEO.

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This Social Bond is issued through Symbiotics’ bond issuing platform (Micro, Small & Medium Enterprises Bonds S.A.) under its Sustainable Bond Framework, which was certified by DNV GL in December 2019 and November 2021. The bond is listed on the Luxembourg Stock Exchange’s Securities Official List and is featured in the Social Bond section.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. 
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard.