Only two months since it closed a $20 million round, SME lender Lumi has raised another $10 million, thanks to the growth of its loan book drastically exceeding its forecasts.
The company, which was launched by Yanir Yakutiel in 2018, offers small businesses loans of up to $500,000, with term lengths of up to three years, as well as business lines of credit up to $25,000.
Strategic investors Arbel and Perennial Partners took out the majority of Lumi’s “top up” raise, which Mr Yakutiel said the company closed in only a week.
“As a start-up, it’s always a balance between how much you raise when, but when we saw we were growing quickly, decided to raise extra capital,” he said.
“It’s a very capital-intensive business, and we need it to feed the beast to keep growing.
“About $9 million was done from existing investors, so a few phone calls within a week, and it was all done.”
The digital lender underwrites and approves loans within two hours, with a maximum loan term of 36 months.
In calendar year 2021, Lumi’s revenue growth was 45 per cent ahead of its expectations. As of last week, its loan book had grown to where it had forecast to hit by the end of June.
“We’re about 4.5 months ahead of where we thought we’d be,” Mr Yakutiel said.
The business is growing so quickly, he admits the company is struggling to hire fast enough. But he plans to double the fintech’s headcount from 65 to 130 people in the next 12 months.
To attract talent, the company has increased salaries in line with the market and emphasises its “holistic” work environment.
“Google will always be able to pay more than us, and others have a bigger and better buffet for lunch, but what we do is offer the best holistic package we can – a good work environment, a new office with an outdoor space, and we’re social and have lots of events,” Mr Yakutiel said.
In December, the company had written more than $200 million worth of loans to date.
Mr Yakutiel put the company’s fast growth down to its fully digital service, it’s targeting of business segments it assesses are likely to require capital, and its customer service.
As well as completing multiple equity raises, in February last year Lumi secured a $40 million debt warehouse facility from National Australia Bank and Melbourne-based money manager Alexander Funds Management.
Though areas of the economy were still struggling with the COVID-19 pandemic, such as CBD hospitality operators, overall Mr Yakutiel said money was still being spent, just in different places.
“There will be winners and losers from this process, and we’re confident that Australia’s SMEs will be a big beneficiary,” he said.
Arbel Fund has backed Lumi since its early days, first as a lender and now as an equity investor.
“Having worked with Yanir and Anna for over three years, we believe that Lumi is in a very strong position to continue its growth trajectory and become the leading non-bank business lender in Australia,” Arbel managing partner Gabriel Low said.
