XSML Capital has successfully closed its latest investment vehicle, African Rivers Fund IV (ARF IV), securing total commitments of $142 million. This achievement surpasses the fund's original $135 million cap, signaling robust investor confidence in supporting small and medium-sized enterprises (SMEs). The fund targets growing businesses in underserved frontier markets across Central and East Africa, including Angola, the DRC, and Uganda.
Strong Investor Confidence in a Challenging Climate
The successful fundraising campaign is particularly noteworthy given the challenging global economic climate for capital raising. Since its first closing in 2024, which secured approximately $98.7 million, ARF IV has attracted additional capital from institutional partners and two German family offices. This broad support underscores the appeal of XSML's focused strategy and its proven track record in the region.
A Strategic Approach to SME Financing
According to Barthout van Slingelandt, managing partner of XSML Capital, the oversubscription reflects strong investor belief in the firm's unique approach. The strategy combines private credit with direct business support, empowering entrepreneurs to expand their operations without surrendering ownership. This model directly addresses the persistent capital gap that hinders the growth of promising businesses in African markets.
Significant Capital Deployment and Sector Focus
ARF IV has already demonstrated significant momentum, with approximately $85 million, or 60 percent of its total capital, deployed as of December 2025. The Democratic Republic of the Congo has received the largest allocation at 47 percent, followed by Angola, Uganda, and Zambia. These investments span diverse sectors critical to local economies, including manufacturing, retail, food processing, and pharmaceuticals.
Addressing a Critical Market Need
The fund is poised to invest in more than 50 companies, continuing XSML's mission to bridge financing shortages for growth-stage businesses. This segment is often considered too risky by traditional banks and too small for larger private equity firms, creating a 'missing middle' in the capital landscape. By focusing on this niche, ARF IV plays a crucial role in fostering sustainable economic development and job creation.
The final closing of African Rivers Fund IV at $142 million marks a significant milestone for both XSML Capital and the African SME sector. The fund's oversubscription in a difficult market highlights a growing recognition of the investment potential within the continent's frontier economies. As ARF IV continues its deployment, it is set to catalyze substantial growth and create lasting impact for entrepreneurs across the region.