IFC and Quona Capital, with participation from existing investors Accion Venture Lab and Newid Capital, have invested $6.5m in Lulalend, South Africa’s first online automated provider of short-term funding for small and medium enterprises (SMEs).

“Quona Capital has been excited about Lulalend from the very earliest stage,” said Johan Bosini, Quona Capital partner.

“Lulalend has built a seamless user experience that solves a massive funding gap faced by so many SMEs in South Africa — enabling SMEs to grow and thrive, rather than getting stuck due to lack of working capital. We’re happy to partner with the IFC to fund this growing company.”

The Series A financing will provide growth capital to help Lulalend scale in response to South Africa’s significant funding gap for small businesses.

Lulalend was established in 2014 by co-founders Trevor Gosling and Neil Welman.

Unlike traditional financial institutions, Lulalend allows SMEs to apply for and receive funding without visiting a bank branch.

Its lending decisions are automated, and funding is provided within 24 hours.

Leveraging data from alternative and online sources, Lulalend utilizes a proprietary scoring algorithm that allows it to evaluate applicants and provide funding to SMEs quickly, conveniently, and transparently.

Most of the funding provided by Lulalend to small and medium-sized businesses is used for inventory or equipment, renovations or marketing.

Trevor Gosling, co-founder and CEO of Lulalend, said: “This fundraise from Quona Capital, a leading VC globally in emerging markets fintech, and IFC , a member of the World Bank Group, provides us with the growth capital and support we need to scale and drive exciting partnerships.”

The partnership with Lulalend is part of IFC’s comprehensive program to deepen small business development and promote access to finance to improve economic inclusion and create job opportunities.

“Small business lending is changing, and by partnering with digital innovators like Lulalend we can capitalize on new sources of data and models to deliver finance to reach more small businesses in South Africa, thus driving job creation and economic growth,” said Kevin Njiraini, IFC’s Regional Director for Southern Africa and Nigeria.