XSML Capital, an Africa-focused Dutch private equity firm, marked the first close of its fourth investment vehicle to back small and mid-sized businesses across Central and Eastern Africa.
The Amsterdam-headquartered PE firm, which manages assets worth over $150 million, raised $98.7 million for the first close of its African Rivers Fund IV (ARF IV) to finance firms in the continent, including in Zambia. The $135 million target fund is aimed for a final close in the second half of the year with a hard cap of $200 million.
The fund plans to make over 50 investments in African SMEs with average target tickets of $2-3 million.
“Despite the tough climate for fundraising last year and particularly in Africa, the first close of ARF IV exceeded the size of our previous fund,” says Barthout van Slingelandt, partner of XSML Capital. XSML’s $85-million third fund was fully deployed in the last quarter of 2023.
The fund IV is backed by a slew of European institutional investors including the British International Investment (BII), the UK’s development finance institution and impact investor; FMO, the Dutch entrepreneurial development Bank; the International Finance Corporation (IFC), the private sector arm of the World Bank Group; Norfund, the Norwegian Investment Fund for developing countries and Swedfund, the Swedish Development Finance Institution. SIFEM, managed by ResponsAbility Investments, a leading impact asset manager, is a new investor for XSML.
According to XSML, ARF IV already has a strong pipeline, including potential new investments in Zambia, where XSML will open an office in the first half year of 2024.
Founded in 2008 by two former FMO executives Jarl Heijstee and Marcel Posthuma, XSML Capital supports talented entrepreneurs in frontier markets in Africa to grow their business into sustainable medium and large companies. With offices across Amsterdam, Kampala, Nairobi, Kinshasa, and Luanda, XSML has so far invested $145 million across 71 SMEs and initiated more than 150 business improvement projects across its portfolio. A quarter of its portfolio is invested in retailers and wholesalers, and around 15% in manufacturing companies.
XSML Capital offers debt, equity and mezzanine finance with ticket sizes in the range of $300,000 to $10 million.
