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# Kholo Capital: Mezzanine Funding for Growth-Stage Startups
- URL: https://www.startup.africa/kholo-capital-mezzanine-funding-for-growth-stage-startups/
- Published: 2025-07-11T12:23:02.000Z
- Updated: 2025-08-12T09:22:03.000Z
- Author: Lungile Msomi

For startups and scale-ups navigating the [funding](https://www.startup.africa/how-to-raise-startup-funding-without-revenue-in-2025/) 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](https://www.startup.africa/equity-vs-debt-funding-for-startups-safes-valuation-dilution-explained/), especially for growth-stage businesses. 

[Mezzanine financing](https://corporatefinanceinstitute.com/resources/career-map/sell-side/capital-markets/mezzanine-fund/?ref=startup.africa) 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](https://www.kholocapital.com/?ref=startup.africa) (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](https://www.kholocapital.com/types-of-investments/?ref=startup.africa) 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.

[Venture Capital South Africa: Startup Funding GuideLearn how South African startups secure VC funding, navigate growth stages and align with investors.![](https://storage.ghost.io/c/c2/50/c250459f-583a-4038-a1bf-9aa5491ac654/content/images/icon/2025-07-28-15-08-40-1-29.png)Startup.AfricaLungile Msomi![](https://storage.ghost.io/c/c2/50/c250459f-583a-4038-a1bf-9aa5491ac654/content/images/thumbnail/Tech-Africa-News-Article--2--1.png)](https://www.startup.africa/venture-capital-in-south-africa-a-startups-guide-to-funding-stages-investor-alignment-and-strategic-growth/)

## **Kholo Capital's Investment Strategy and Focus Sectors**

Kholo’s strategy goes beyond financial returns. Its investment philosophy is rooted in sustainable development and transformation, with a focus on: 

- Social, [environmental](https://www.startup.africa/south-africa-joins-1b-global-programme-to-decarbonise-industry/), and economic impact.
- 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](https://www.startup.africa/kholo-capital-closes-funding-round-of-r1-4-billion/), 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).

The fund is [sector-agnostic](https://www.kholocapital.com/industry-sector-criteria/?ref=startup.africa) but prioritises companies in: 

- Education
- Healthcare
- Telecommunications
- Consumer Facing
- [Financial Services/Technology](https://www.startup.africa/fintech-in-south-africa/)
- Manufacturing
- Media
- Real Estate
- Selected Infrastructure
- Proven Information Technology

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](https://www.kholocapital.com/our-process/?ref=startup.africa) 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](https://www.kholocapital.com/contact/?ref=startup.africa).