South African fintech Lula raises $21 million to help small businesses access quick cash

South African financial technology company Lula has raised about $21 million (R340 million) from the Dutch entrepreneurial development bank, FMO. The funding will help the company provide fast, flexible loans to small and medium-sized businesses across the country, companies that often struggle to get loans from traditional banks.

Small and medium-sized businesses (SMEs) are companies with a limited number of employees or that operate on a smaller scale than large corporations. Many SMEs struggle to get loans because they may lack sufficient collateral, a lengthy financial record, or a stable cash flow. Lula’s platform aims to solve this problem.

The company’s recent growth has attracted new investment. Following a $35 million Series B funding round led by Lightrock in 2023, with participation from the International Finance Corporation, Quona Capital, DEG, and Triodos Investment Management, Lula secured an additional $10 million local-currency loan from the International Finance Corporation late last year to further support small business owners.

Lula to help businesses access money when they need it

Trevor Gosling, co-founder and chief executive officer of Lula, said the latest funding will allow the company to scale its technology-driven lending platform.

“This investment strengthens Lula’s ability to deliver fast, flexible working capital, helping businesses manage day-to-day operations and unlock growth opportunities,” he said.

Receiving the funding in local currency is particularly important. It protects small business owners from exchange rate fluctuations, allowing the fintech company to offer predictable and sustainable loan rates.

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This new funding can be a lifeline for small business owners, helping them cover expenses such as staff salaries, inventory, or other immediate needs without the long wait for traditional bank loans. For the overall economy, this demonstrates the growing importance of alternative finance options in supporting businesses that are vital to local communities.

With this investment, Lula is positioned to expand its reach, provide more reliable funding, and help small business owners thrive. As more small businesses gain access to capital, they can expand, create jobs, and contribute to the local economy’s growth.

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