For startups and scale-ups navigating the funding landscape, understanding the right type of capital for your stage and sector is critical. From equity, debt to grants, the financing options are vast. But one lesser known funding route - mezzanine financing - can offer a bridge between traditional debt and equity, especially for growth-stage businesses.
Mezzanine financing is a hybrid financing option that combines debt and equity characteristics, typically positioned between senior debt and equity in a company’s capital structure.
One firm specialising in this hybrid funding model is Kholo Capital (Kholo), a South African-based investment firm with a growing reputation across the continent.
About Kholo Capital
Established in 2020 by former Vantage Capital partners Mokgome Mogoba and Zaheer Cassim, Kholo Capital is a majority black-owned and managed fund management business. The firm is focused on delivering flexible financing solutions that blend impact with strong commercial returns.
Kholo offers a range of investment products tailored of for mid-market companies, including:
Growth capital – Expansion and working capital for growing companies.
BEE financing – Capital that unlocks value for black-owned businesses and supports transformation.
Acquisition financing – Funding to allow investors to acquire profitable businesses across Africa.
Property financing – Funding for shopping malls, hotels, office buildings and mixed-used developments across Africa.
LBOs/MBOs – Support for clients looking to acquire businesses in a cost-effective manner.
Transformation, job creation, gender inclusion, economic growth, financial inclusion, social cohesion and good governance.
Investment into key sectors of the South African economy such as healthcare, education, telecoms, fintech and infrastructure.
Inside the R1.4 Billion Kholo Mezzanine Debt Fund
At the core of Kholo’s offering is the Kholo Capital Mezzanine Debt Fund, a R1.4 billion fund aimed at providing flexible capital solutions to medium-sized businesses.
Key features:
Ticket size: R70 million to R205 million.
Eligibility: Businesses generating a minimum of R25 million in EBITDA per annum.
Tenor: 4 to 7 years.
Target returns: +17% (combining interest and equity upside).
Kholo does not consider businesses operating in venture capital, turnaround businesses, primary agriculture, mining and farming, micro lending, tobacco, hard liquor, ammunition, and government amongst others.
Kholo Capital’s Investment Process and Support
Kholo employs a comprehensive 9-point investment process from origination and screen to negotiation of transaction and deal executions, up till the exit point. Post-investment, the firm provides active monitoring and value-added support to help businesses meet performance targets and unlock long-term value.
How to Contact Kholo Capital for Mezzanine Financing
For medium-sized businesses seeking capital with flexibility and a strategic partner who understands the nuances of African growth markets, Kholo Capital offers a compelling proposition. To learn more or get in touch with the team, reach out to their listed contacts here.
Lungile is the Digital Editor for TechAfrica, with a knack for storytelling, technology and innovative ideas. Working with TechAfrica, she takes simple ideas and turns them into amazing stories.
Lungile Msomi
