Sunday, 2nd March 2025,
By Inafrika Reporter
Kholo Capital Mezzanine Debt Fund I has secured R1,4 billion in commitments, marking a significant milestone in its mission to support small and medium-sized businesses in Southern Africa. The fund is strategically designed to provide growth capital, BEE financing, and acquisition funding to sectors with high social impact, including social housing, healthcare, education, renewable energy, food security, ICT, fintech, and infrastructure. By aligning with the United Nations’ Sustainable Development Goals, Kholo Capital is dedicated to fostering economic growth, job creation, and sustainable transformation in the region.
Mezzanine debt plays a vital role in business financing, filling equity funding gaps and offering tailored, flexible loan solutions. It sits between senior debt and equity, making it an attractive option for businesses looking to scale without significant equity dilution. Kholo Capital’s investment strategy focuses on companies generating a minimum EBITDA of R25 million, deploying between R70 million and R200 million per investment. The fund’s approach ensures that businesses gain access to capital while maintaining financial stability and growth potential.
Mokgome Mogoba, Founder and Managing Partner, expressed strong confidence in South Africa’s economic prospects, highlighting the resilience and optimism of its people. He emphasized the fund’s commitment to job creation, aiming to generate over 500 new jobs at a rate exceeding 40 jobs per investment. More than half of the fund’s investments will be directed toward black-empowered businesses, reinforcing its dedication to economic transformation and sustainable development. He also noted the fund’s focus on rural and township economies, ensuring that financial support reaches businesses that need it most.
Zaheer Cassim, also a Founder and Managing Partner, underscored the advantages of mezzanine debt as a non-dilutive funding solution for family-owned and BEE businesses. Given the increasing risk aversion among banks due to regulatory constraints, lending to small and medium enterprises has declined, creating an opportunity for mezzanine debt to bridge the gap. Cassim expressed gratitude for the trust and confidence investors have shown in Kholo Capital, recognizing its ability to offer flexible and impactful financial solutions.
With a strong pipeline of opportunities, Kholo Capital Mezzanine Debt Fund I is poised to drive economic growth, foster long-term partnerships, and deliver measurable social impact while generating robust commercial returns.
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