Trevor Gosling, the brains behind Lulalend, is extending even more financial assistance to small businesses through his new platform, Lula.
Imagine a South Africa without small businesses. Imagine the impact on employment, especially since SMEs are increasingly responsible for job creation. Imagine the sluggishness of the economy, given that these entities contribute no less than 39% to our GDP. And imagine the poverty of our business landscape if SMEs – which make up 98% of all South African businesses – were no longer.
This isn’t as far-fetched a scenario as it may seem. The odds stacked against South African small businesses are staggering: at a time when consumers are struggling, these entities share their pain – compounded by factors like inflation, rising costs and, of course, ever-present load-shedding.
In the face of these challenges, it’s not surprising that the country’s small business owners are reporting a sharp decline in confidence. What’s more, these issues add to those that have long been a trial for those who wish to start their own enterprise; most notably, lack of access to finance.
Enter Trevor Gosling and Lulalend, a fintech platform which has supplied more than 25 000 assisted loans to small businesses since it was established in 2014. Now, Trevor is preparing to build on the support already offered to SMEs with Lula, a full-service banking solution.
A passion for entrepreneurship
Gosling’s success with Lulalend came as no surprise, given that the venture represented the seamless marriage of his experience in the financial service industry with his passion for entrepreneurship and fascination with online commerce.
‘I grew up in a family of entrepreneurs,’ he explains, adding that his parents – both pharmacists – owned their own pharmacy – while even extended family members like grandparents, uncles and cousins were business owners. ‘That said, my mother was eager for me to study a formal profession.’ Since accounting and numbers came easily to him, Trevor felt that a CA qualification was a natural choice.
His first career move after articles was into the world of investment banking. ‘I hadn’t had much of a chance to explore this part of financial services during my articles at KPMG, but it seemed to offer a lot of opportunities and I was keen to experience it,’ he remembers. Stints at RMB and then Goldman Sachs in London proved to him that it was, indeed, an exciting and fast-paced industry – but, still, he felt unfulfilled. ’It wasn’t that I didn’t enjoy my time in the field, but I had an innate need to build something.’
Cue his return to South Africa. Trevor joined his brother, who had recently founded Groupon, the online discount e-commerce marketplace which was one of South Africa’s first digital success stories. With insight into the company’s financial operations, Trevor gained a first-hand view of the digital landscape, its challenges and opportunities – and became more determined than ever to make the move to entrepreneurship. ‘I decided that it was now or never: the time had come to leave investment banking entirely and start my own e-commerce company.’
That’s how 5ounces, a site that specialised in gourmet goods – think wine, craft beer, wine accessories and other foodie products – was born. Within two years, the venture had attracted the attention of multimedia giant Naspers, and Trevor found himself once again wondering about his next step after he sold the company. ‘The 5ounces story was a great one, and I was proud to be part of it. I stayed at the helm for a year, until it was fully integrated within Naspers, and I experienced so many things during that time – some great, others less so,’ he says.
Obviously, such a time gives way to plenty of learnings, and chief of these was that being a business owner is very different to being part of the corporate world. Trevor says that although he still had his eye fixed on the entrepreneurial path, his involvement with 5ounces and Naspers had taught him that he would prefer not to be the sole founder in his next venture. This time, he wanted to make the journey with a partner by his side – preferably someone who was well versed in technology.
The big question was: how would he and the CTO he envisaged apply their skills, knowledge and talent? Trevor says that he felt the time had come to move away from e-commerce, although he was aware that there was massive scope to leverage all the insight he had acquired. At the same time, he found himself thinking back to financial services: ‘I had enjoyed the landscape and, most of all, what it can do for people,’ he says.
Fintech – at the time still such a fledgling area that the term had yet to be coined – sparked his interest because it allowed him to combine his two interests. His platform now decided, it was time to focus its direction – and where better than small business: a sector that had fascinated him since childhood?
Resources for the underserviced
The launch of Lulalend satisfied Trevor’s entrepreneurial drive, while also creating an avenue for him to support the businesses he understood as vital to the South African economy. ‘My research showed that the small business sector was completely underserviced, especially in terms of lending. I wanted to address this, but in a way that blew the lights out, offering access to funds without any meetings or admin, all within 24 hours.’
Trevor’s instincts about the need for a service such as Lulalend were spot on. Within years, the company’s customer base had reached tens of thousands – but Trevor felt that its focus on a single product was limiting. ‘It’s one thing to attract customers, but we had to think about how we could retain them. What could we offer that would help in this regard, without losing focus on our key levers?’
After extensive thought, the team developed a digital banking solution that helps to answer the company’s challenges around retention, while also speaking to customer needs.
Trevor explains Lula’s key point of differentiation: ‘Current incumbents tend to focus on banking solutions for consumers or big corporates, which means that small business is still overlooked. That’s where the big opportunities are – and since we think about nothing but SMEs day in, day out, we are perfectly positioned to offer products that empower SMEs and help them do business, better.’
After a soft launch which ‘saw the business scaling up nicely’, Lula was officially introduced to the marketplace in July. Trevor says that early signs of a warm welcome – such as the utilisation of accounts and the take up of tools to help SMEs manage their cashflow – were very encouraging; not surprising, since Lulalend’s extensive knowledge of its customers’ businesses means that it is able to tailor highly customised products.