International Holding Company (IHC), an Abu Dhabi-based, publicly traded company comprising more than 372 entities with international operating segments, announced an investment of 734 million dirhams ($200 million) in Lulo Colombia, an entity in which they already owned 25%.
Lulo Bank is the new player in the financial and neobank industry in the region. With an accelerated growth in Colombia, the neobank seeks to expand its operation in Latin America. Lulo was cofounded by Jaime Gilinski, an entrepreneur with more than 45 years of banking experience in Latin America, the United States and Europe, who saw the opportunity to create the first digital bank in Colombia to democratize financial services and eliminate the frictions that Colombians face today.
Syed Basar Shueb, Chief Executive Officer (CEO) of IHC commented on the investment: “The fintech ecosystem in Latin America has risen quickly over the past couple of years with sustained growth observed in all segments and in the number of active fintech companies, especially digital banking which has witnessed the most substantial growth at an average annual rate of 57 per cent between 2017 and 2021 to reach 60 per cent.
In the case of Colombia, it has made significant progress in terms of financial inclusion with the increase in access to financial products, which rose to 87 per cent. It’s critical for us to align any transaction with our growth strategies, whether to acquire new capabilities or consolidate, and Lulo Colombia sits very well with our expansion plans in Latin America.”
Aiming to democratize banking, Lulo has a vision to create simple, people-centric and effortless financial services. Since its inception, the neobank was created to address the main pains faced by Colombians: excessive fees, high costs, physical and digital experiences, as well as poor customer service. Lulo is the first digital bank in Colombia authorized by the Superintendencia Financiera, which has reached more than 100,000 active users since its market launch in June this year.
With a focus on solving these pains and giving its users back full control of their money, Lulo seeks to create a differential experience and transfer the bank’s efficiencies to its users. By being 100% digital, Lulo can automate its processes to increase private and confidential operational efficiency, a reality that other banks in the industry do not have.
The first products on its roadmap are the Lulo Account, a fee-free savings account, a Mastercard debit card that can be used worldwide and online, and Lulo Credit, a frictionless, free destination credit with approval and disbursement in minutes.
Benjamin Gilinski, Lulo Bank’s cofounder said: “Digital banking has come a long way in Colombia. Adoption of new behaviors and new technologies takes time, but it’s already dramatically changed how consumers interact with financial products in our market. The financial companies that win in the future will be those that understand that human behavior is constantly changing and keep on investing in new technologies. We are thrilled to have IHC join our mission of revolutionizing the financial landscape in Latin America.”
The investment represents 49.9% of the neobank’s ownership, according to Bloomberg. Lulo Bank currently has more than 120,000 active users and expects to have more than 200,000 before the end of 2022.
With this announcement, the Arab company, which is also in the middle of a takeover bid for Nutresa, seeks a greater presence in Colombia through businesses that are closely related to its partners the Gilinskis.