SME-focused XSML Capital hits $98.7m first close of latest Africa fund

STARTUP VENTURE CAPITALMarch 17, 2024 at 8:34 AM UTC

TLDR

XSML Capital launches African Rivers Fund IV (ARF IV) with $98.7 million initial closing
Funds aimed at supporting SMEs in Central and Eastern Africa, focusing on the "missing middle" segment
Expansion plans to double investments and impact, branching into new markets like Zambia

XSML Capital, a provider of growth capital to Small and Medium Enterprises (SMEs) in Central and Eastern Africa, has launched its fourth fund, the African Rivers Fund IV (ARF IV), with an initial closing of $98.7 million.

Established in 2008, XSML aims to empower talented entrepreneurs in frontier markets across Africa, facilitating the growth of their businesses into sustainable medium and large companies. The firm offers expertise, networking opportunities, and tailored financing solutions, aimed at fostering local talent and driving lasting prosperity in underserved markets.

The new funding enables XSML to double its investments and impact over the forthcoming years, expanding its reach into new markets such as Zambia. ARF IV succeeds the fully invested ARF III and is dedicated to supporting promising SMEs in Central and East Africa, particularly in the "missing middle" segment overlooked by traditional banking and financial institutions.

Key Takeaways

XSML represents one player in a pool of companies, both legacy and startups, looking to provide SME financing in Africa. Lack of access to working capital remains a huge problem facing the growing small and mid-sized retail sector in emerging and frontier markets, including Africa. Available data shows a $330 billion financing deficit for the small enterprises that make up 90% of businesses on the continent—and it’s a problem several startups and foreign investors are particularly keen to address as it promises attractive returns.

XSML Capital

Growth Capital

Zambia

SME Funding

Business Lending

SMEs

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Finance