Ecopharm, a pharmacy chain in Uganda, has received further funding from an existing private equity investor as it aims to add three more outlets with the fresh money.
XSML, a PE firm active in central and east Africa, has made an additional investment in Ecopharm via debt and equity. The amount of investment wasn’t disclosed.
Jarl Heijstee, managing partner at XSML, said: “Ecopharm is a good example of helping our existing clients grow and deepening our relationship by also taking an equity stake in the company.”
Since XSML’s first investment in 2017, Ecopharm has more than doubled its network to 15 pharmacies in Kampala.
Ecopharm sells pharmaceutical brand products and generics as well as locally produced pharmaceuticals, including over-the-counter and personal care products.
Founded in 2008, Ecopharm’s pharmacies are spread across Kampala. It is also engaged in the wholesale of selected branded generic pharmaceuticals in Uganda and has exclusive import arrangements with several European branded generic pharmaceutical manufacturers.
XSML invested via its latest fund, the African Rivers Fund III (ARF III). This fund made a first close at US$54 million last September. After its maiden fund, the Central Africa SME Fund, and its second fund, African Rivers Fund, XSML now has total assets under management of US$125 million.
The ARF III fund targets SMEs in the Central and East African region covering Angola, Democratic Republic of the Congo, Uganda, the Republic of Congo and surrounding countries. It follows the investment strategy of its predecessor funds, CASF and ARF, by providing debt, equity and mezzanine finance to fast-growing companies in these regions.
The third fund’s limited partners (LPs), or investors, include Belgium Investment Company for Developing Countries, the Dutch Good Growth Fund (managed by Triple Jump), Dutch development bank FMO, International Finance Corporation. All of them had invested in previous XSML funds, too.
Swedfund and the SDG Frontier Fund, which includes nine private and institutional investors from Belgium, also came in as LPs in the third fund.
Through CASF and ARF, XSML has provided US$70 million in risk capital with an investment size ranging from US$100,000 to US$5 million. It has backed over 50 SMEs across ten sectors. Both CASF and ARF have been fully invested, and have exited 12 investments.