XSML Capital secures $142M final close for African Rivers Fund IV

In a significant show of confidence for investment in African frontier markets, XSML Capital has announced the final close of its African Rivers Fund IV (ARF IV). The fund reached a total of $142 million, notably surpassing its original “hard cap” of $135 million despite a globally tightened fundraising environment.

This milestone reinforces XSML’s position as a primary provider of growth capital to Small and Medium-sized Enterprises (SMEs) in some of the continent’s most underserved markets.

Expanding Investor Confidence

The journey to the final close saw a surge in institutional and private interest. Since the fund’s initial close, the investor syndicate expanded to include:

• Development Finance Institutions (DFIs): Three additional DFIs joined the fund, seeking both financial returns and developmental impact.
• Private Wealth: Two German family offices committed capital, highlighting an increasing interest from private European investors in African frontier SMEs.

Barthout van Slingelandt, Managing Partner of XSML Capital, noted that exceeding the target size during a “challenging fundraising environment” is a clear validation of the firm’s localized, hands-on investment philosophy.

The Strategy: Private Credit as a Growth Engine

Unlike traditional private equity, which often requires entrepreneurs to surrender significant control, ARF IV leans heavily into a hybrid of private credit and business support:

• Ownership Preservation: Entrepreneurs can access long-term, flexible funding to scale their operations without diluting their ownership.
• Hands-on Support: XSML provides technical assistance beyond the check, helping local businesses institutionalize and professionalize.
• Early Liquidity: For investors, this model offers a unique advantage—the ability to generate liquidity earlier in the investment cycle than typical equity-heavy funds, a rare and valued feature in African markets.

Portfolio Deployment and Geographic Reach

XSML operates through a decentralized model with boots-on-the-ground offices in Angola, the DRC, Kenya, Uganda, and Zambia. This proximity allows them to identify “hidden gems” in the manufacturing, retail, food processing, and pharmaceutical sectors.

Status as of December 2025:

• Capital Committed: $85 million (approximately 60% of the total fund).
• Target: Building a robust portfolio of over 50 companies.
• Regional Allocation:

The fund is strategically targeting essential “real economy” sectors that drive local consumption and industrialization, specifically manufacturing, beverages, and the pharmaceutical industry. This sector-agnostic approach within the SME space allows ARF IV to remain resilient against localized economic shocks.