Fintech lender Lumi raises another $10m to keep pace with demand

Fintech lender Lumi raises another $10m to keep pace with demand

Lumi founder and CEO Yanir Yakutiel (left) and COO Anna Hawter (right).

Sydney-based fintech Lumi has secured another $10 million in capital funding from existing investors Arbel Fund and Melbourne-based Perennial Partners to take advantage of the faster than expected growth in specific market sectors.

The small-business lender has now raised $30 million in the past two months, with the additional funds to be used to grow Lumi’s services and technology platform.

Lumi CEO Yanir Yakutiel believes the outlook for Australia, coming out of lockdowns, is strong while the potential growth in sectors such as CBD hospitality is faster than the business had previously forecast.

“We are seeing work and the high-earners of our society become much less centralised, so there is a ripple effect of more economic activity moving away from the centre of big cities into the periphery,” said Yakutiel, who founded the company in 2018..

“There will be winners and losers from this process, and we’re confident that Australia’s SMEs will be a big beneficiary in this process.

“It is your larger service providers such as restaurant chains that benefit from centralisation, being able to stomach the high costs associated with operating on prime real estate.

“SMEs are often found further out - for the first time in a long time; the money is coming to them.”

Lumi’s technology is built to process loan applications within hours to provide small business loans, between $5,000 and $500,000, with three- to 36-month terms to small and medium-sized enterprises (SME).

Expanding into WA and new offices planned for Sydney, Brisbane, and Melbourne, the business intends to double its existing headcount of 65 people over the next 12 months.

“We are growing much faster than forecast, which is ultimately why we have raised additional capital so soon after the last round to help fuel this growth,” Yakutiel said.

“We have always believed it's the investment into our technology platform that will help set us apart, and that strategy continues to be proven effective.

“We are now truly beyond any ‘start-up’ label or mentality and will be heavily investing into every aspect of our offering to start to challenge the status quo of small business lending across the nation.”

Lumi raised $20 million in December 2021 to improve its capital structure, having recently doubled its funding facilities, which also saw Perennial Partners enter as strategic investors.

“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,” head of private investments at Perennial Partners Brendan Lyons said.

“Since our previous investment in Lumi, only a few months ago, Lumi has grown faster than expected, and we were happy to continue to support its growth.

“We’re looking forward to working with Yanir and his team on the next stage of growth for Lumi as it expands in 2022.”

Last year, Lumi announced a partnership with Openpay (ASX: OPY) to allow for SME funding to OpyPro customers.

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