South Africa-based online lending platform Lulalend is set to receive $2.8 million from the International Finance Corporation - IFC - as part of their Series A. The revelation was made by the IFC disclosure which was made public on April 8, 2019. It was also confirmed by Lualend in an email to Digest Africa, this week.
"Lulalend is currently considering an equity investment from the IFC as part of its Series A Raise," the company wrote. However, they did not reveal the size of the round that they are looking to raise. Instead, the company pointed out that "[the Series A round] will still take a few more weeks before closing and for further detail to be made public."
By backing Lulalend, the IFC is stamping its foot and becoming a significant backer of African startups, especially those seeking to raise funding from Series A onwards.
In 2018 alone, the institution was part of four different investment rounds for four different startups - Kobo360, Twiga Foods, Vezeeta and Africa's Talking. In total, the rounds it took part in were valued at a combined $37.6 million making it one of the most active early venture investors of 2018 per Digest Africa data.
In October 2016, Lulalend announced that it had raised an undisclosed seed round that Accion Venture Lab - the early-stage investment vehicle of the financial inclusion leader Accion - led with participation from Newid Capital and Hallmann Holding International Investment GmbH.
According to the IFC disclosure, Team Africa Ventures - an investor in Wumdrop, Click2Sure and LifeQ - is also a shareholder in Lulalend. The other shareholders are; Trevor Gosling (CEO), Neil Welman (CTO), Alexander Schuetz, IFC, Quona, Hallman Holding International, Accion, Team Africa Ventures, Newid Capital, Lutz Seebacher as well as the company's employees.
Founded in 2014 - though officially launched in May 2015 - by Neil Welman and Trevor Gosling, the Cape Town-based fintech set out to "address a major need for credit access in South Africa".
The startup provides "quick, transparent online credit to small businesses in South Africa" by leveraging technology to provide loans to banked but underserved businesses in South Africa. "Lulalend’s customers are MSMEs with annual turnover ranges of $36K-3.5MM, from the retail, services, manufacturing, logistics and construction sectors,' reads part of the disclosure.
The company's interest rate is calculated at 5% for the first two months and 1% for months three to six, which comes to an overall charge of 14%.