Small business lender Lumi shines bright after COVID, raises A$20M

Lumi Business Growth

Australian financial technology company and leading alternative lender, Lumi, has announced the completion of an A$20M capital raise, which will be used to help the company expand its services and team as the economy recovers from the pandemic.

The A$20M raise, saw Perennial Partners join Lumi as a new strategic investor alongside a consortium of others. Existing investors in Lumi, including cornerstone investor Josh Liberman Investment Group, also participated in the raise. 

As part of the raise, Lumi raised a junior mezzanine tranche to improve its capital structure and to fund additional growth. The junior debt was provided by Alexander Funds Management and Roadnight Capital. Lumi recently doubled its funding facilities and the addition of an additional tranche will allow it to use its capital more efficiently.  

Lumi is quickly establishing itself as a leading lender to Australian SMEs, following its launch in August 2018. It focuses on providing small to medium-sized enterprises (SMEs) a faster, easier way to access working and growing capital. The company has announced a partnership with Openpay (ASX:OPY) which enables Lumi Financial Management to provide SME funding to OpyPro customers including HP and Kogan (ASX:KGN).

The A$20M raise coincides with aggressive hiring policy to accommodate the growth of the business. Lumi has doubled its headcount to 60, with additional workers joining the business across its technology, finance and marketing & sales divisions hired over the past 12 months. It plans to double this figure again in 2022.

The company has recently signed a new lease for a new office in Sydney’s CBD to accommodate the growing team. This is a testament to its bullish approach on the recovery and growth of Australia’s small business sector as we exit lockdown measures across the nation.  

Lumi CEO Yanir Yakutiel welcomed the new financial and strategic investors and the opportunity to build on the momentum the alternative lender has in the Australian market:

“Since our inception, there’s been a lot of industry commentary around the ‘promise of fintech’ and the disruption it will bring. During the crisis, lenders like Lumi helped keep real Australian businesses going with innovative products like the Lumi Kickstarter loan. Now we must start to scale to the size where we can be true competitors on a national level, and we are proud to have the backing of our investors to go to seize the opportunity coming out of the global pandemic,” Mr Yakutiel said.

We’ve always believed it’s the investment into our technology platform that will help set us apart. With the capital we have raised today, we can move away from the narrow product focus that tends to define lending, and build out a broad range of services for Australia’s SMBs to power their businesses. Our product offering is constantly evolving to suit the changing needs of Australian small businesses. The ability to launch innovative products quickly has always been our competitive advantage.”

Brendan Lyons, Head of Private Investments at Perennial Partners said, “Lumi is a great Australian growth story. We agree with its vision of economic recovery and growth, and the need for finance to modernise and match the needs of its customers. We’re looking forward to working with Yanir and his team on the next stage of growth for Lumi as it expands in 2021.”

Lumi offers small business loans of up to $500,000 with term lengths up to three years, as well as business lines of credit up to $250,000 to help small businesses manage cash flow. Lumi fulfils successful loan applications within 24hrs, with a maximum loan term of 36 months.

Matthew Giannelis

Secondary editor and executive officer at Tech Business News. Contracting as an IT support engineer for 20 years Matthew has a passion for sharing his knowledge of the technology industry. He's also an advocate for global cyber security matters.

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