AFRICA – XSML Capital, a fund manager investing in SMEs in the Central and Eastern regions of Africa, has announced the launch of its fourth fund, the African Rivers Fund IV (ARF IV) with a first close of US$98.7 million.
With the recently secured funds, XSML is now in a position to double its investment volume and consequently, its impact in the years to come. The company also plans to explore new markets for investments, like Zambia.
XSML Capital’s managing partner, Barthout van Slingelandt, expressed his satisfaction regarding the successful first closure of ARF IV.
He shared that raising funds was undoubtedly challenging last year, particularly within Africa, but the overwhelming response and financial bolster achieved surpassed the firm’s previous fund size.
He sees this accomplishment as a testament to the investors’ confidence in the firm’s investment strategy and performance. He further emphasized their shared enthusiasm about the apt opportunities to invest in driven entrepreneurs in some of Africa’s untapped frontier markets.
Established in 2008, XSML Capital has a dedicated mission to aid ambitious entrepreneurs in Africa’s frontier markets. Its objective is to aid these businesses in their growth journey, transforming them into sustainable mid-to-large-scale enterprises.
The firm offers its profound expertise, an extensive network, and tailored financial solutions, designed to cultivate local talent and stimulate long-lasting prosperity in Central and East Africa’s underutilized markets.
ARF IV is the successor to ARF III, which has been entirely invested now. The African Rivers Funds aim to financially nurture small and medium-sized enterprises that show good promise, particularly in Central and East Africa.
These businesses often get sidelined by the banking sector and other financial institutions, finding themselves in an overlooked ‘missing middle’ segment.
Interestingly, existing investors from previous funds have reasserted their faith in XSML’s approach by reinvesting and even escalating their commitment, in some cases, doubling their exposure. The endeavors have also attracted a new investor to join the ranks.
VC firm Ring Capital launches impact investment vehicle
In related news, VC firm Ring Capital has announced the launch of Ring Africa, its impact investment vehicle for French-speaking West Africa, which aims to support young start-ups with a strong social and environmental impact, and has a target of EUR50 million (US$55 million).
Ring Capital finances and supports entrepreneurs offering solutions to key social and environmental challenges through three investment vehicles and a philanthropic fund.
Following the launch of its impact seed fund, GENERATIONS, in 2023, Ring Capital has now launched Ring Africa, an impact investment fund aimed at startups in Francophone West Africa.
This fund will support the strong growth of impact entrepreneurship in Francophone West Africa.
Targeting startups at the pre-seed, seed and Series A stages, investments will focus on solutions specific to the African continent’s challenges, including transitioning to the formal economy, adapting to climate change, and developing sustainable agriculture and consumption.
Ring Africa will specifically support the new generation of entrepreneurs and the feminisation of entrepreneurship.
“Africa, which is already experiencing the consequences of climate change and its social repercussions, is simultaneously witnessing the emergence of structural solutions for its future,” said Nicolas Celier, co-founder of Ring Capital.
“Being an impact investor means giving a chance to environmental and social solutions and financing a new generation of entrepreneurs. We are very excited about this launch, which will enable us to concretely improve living conditions and support a new generation of business leaders.”
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