South Africa: Lula secures over $21m to boost SME funding

South African fintech Lula has secured R340 million (over $21 million) in local currency funding from the Dutch entrepreneurial development bank, FMO, a move to tackle the persistent funding gap for small businesses.

The investment is aimed at dramatically expanding access to finance for small and medium enterprises (SMEs) across the country that are often sidelined by traditional banks.

The capital infusion will fuel Lula’s technology-driven lending platform, which specialises in providing working capital to businesses hampered by limited collateral, thin credit histories, or uneven cash flows. The platform is designed for faster credit decisions, addressing the urgent, shorter-term funding needs that are critical for SME survival and growth.

“Access to capital remains one of the most severe constraints facing small businesses,” said Trevor Gosling, Co-founder and CEO of Lula. “Securing this funding in rand is a crucial advantage, as it eliminates exchange rate risk and allows us to offer more stable and accessible financing. This capital will directly support our plans to scale lending to thousands more entrepreneurs over the next three years.”

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The deal with FMO marks the latest milestone in Lula’s aggressive growth trajectory. In 2023, the fintech closed a $35 million Series B round led by global impact investor Lightrock, with participation from the International Finance Corporation (IFC), Quona Capital, DEG, and Triodos Investment Management. This was followed in late 2025 by a $10 million local-currency loan from the IFC, further bolstering its lending capacity.

Angelica Ortiz de Haas, Africa Manager for Financial Institutions at FMO, emphasized the strategic alignment of the investment. “Supporting fintechs that drive financial inclusion is at the core of FMO’s strategy,” she stated. “Local currency financing is particularly powerful because it enables lenders like Lula to extend more sustainable funding to the small businesses that are the backbone of South Africa’s economy.”

FMO’s investment is positioned as part of a broader initiative to strengthen competition and resilience in the SME funding market by backing locally focused fintech lenders. The partnership is expected to enable Lula to significantly increase its support for South Africa’s SME sector, providing a vital financial lifeline to businesses essential for economic growth and job creation.