South African fintech startup, Lula, has secured $21 million funding injection from Dutch entrepreneurial development bank FMO, as it moves to scale its lending-as-a-service platform and expand access to finance for micro, small, and medium enterprises (MSMEs).
Founded in 2014 by Trevor Gosling and Neil Welman, Lula began as an online provider of short-term business funding before rebranding in 2023 and expanding into neobanking.
Today, the company positions itself as a full-service financial platform for small businesses, offering instant access to credit, business bank accounts, and advanced financial analysis tools.
“Over the next three years, this capital will allow us to scale our impact exponentially, reaching thousands of additional entrepreneurs and helping them transition from survival to long-term resilience,” said Gosling.
What You Need to Know
The funding, structured entirely in local currency, is expected to strengthen Lula’s ability to provide predictable and sustainable lending to small businesses while shielding borrowers from exchange rate volatility, an increasingly pressing issue in emerging markets.
“Receiving this capital in local currency is a critical enabler. It eliminates the volatility of exchange rate fluctuations, allowing us to provide stable, predictable, and sustainable lending rates to our customers,” Gosling said.
At the core of Lula’s offering is proprietary artificial intelligence technology designed to simplify cash flow management and credit assessment for business owners.
By automating lending decisions and integrating financial data in real time, the platform aims to reduce friction in accessing capital, one of the most persistent challenges facing South African SMEs.
Building on a Strong Funding Trajectory
The FMO investment follows a US$35 million Series B funding round raised in 2023, which enabled the company to scale its operations and formally enter the neobanking space.
With this latest injection, Lula has now raised a combined US$56 million in growth capital over the past two years, underscoring continued investor confidence in its model.
Unlike many venture-backed African fintechs that raise capital in foreign currency, Lula’s latest funding has been provided entirely in South African rand, a strategic decision that aligns with its lending operations.
From working capital loans to all-in-one banking solutions, Lula says its tools are built to help entrepreneurs move beyond day-to-day survival and towards sustainable growth.
A Development Finance Lens
FMO’s investment reflects the growing role of development finance institutions in supporting fintech platforms that address structural gaps in SME financing.
Across South Africa, small businesses account for a significant share of employment and economic activity, yet continue to face limited access to affordable credit from traditional banks.
By backing Lula’s lending-as-a-service model, FMO is effectively supporting an infrastructure layer that can be embedded into broader business ecosystems, including accounting platforms, marketplaces, and payment providers.
The approach aligns with a wider trend in African fintech, where companies are moving beyond direct-to-consumer lending and into embedded finance, offering credit and banking services at the point of need.
Positioning for the Next Phase of Growth
As Lula scales, its challenge will be to balance rapid growth with responsible lending, particularly in a market marked by economic uncertainty and pressure on small businesses.
The company’s reliance on AI-driven credit assessment and real-time cash flow analysis is intended to improve risk management while expanding access.
With fresh capital secured and a broader product suite in place, industry leaders say Lula is now positioning itself as a critical financial partner for South Africa’s MSME sector.
Talking Points
It is significant that Lula has secured ZAR340 million in local-currency funding, a structure that directly addresses one of the biggest risks in SME lending across Africa: exposure to exchange rate volatility.
This approach positions Lula to offer more stable and predictable lending rates, giving small businesses the confidence to borrow and plan without the uncertainty that often comes with foreign-currency-backed loans.
At Techparley, we see Lula’s evolution from a digital lender into a broader neobanking and lending-as-a-service platform as a natural response to the changing needs of South Africa’s MSMEs, many of which are looking for integrated financial tools rather than standalone credit.
The combination of instant funding, business bank accounts, and AI-driven cash flow analysis allows small businesses to manage their finances with a level of insight and efficiency traditionally reserved for larger enterprises.
However, the real test will be execution at scale. Sustained impact will depend on how well Lula balances growth with responsible lending, especially in a challenging economic environment where many SMEs remain financially fragile.
As Lula deploys this capital over the next three years, there is a clear opportunity to deepen partnerships and embed its services across broader business ecosystems, potentially positioning the company as a foundational layer for SME finance in South Africa.
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