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South African impact investor Secha Capital has announced a second close of its $40 million Secha Capital Impact Fund II. Johannesburg-based E Squared Investments has joined as a new backer alongside existing backers RMB Ventures, the SA SME Fund, and 27four Investment Managers.
The fund, which targets small and medium-sized enterprises in South Africa’s productive economy, has already deployed 40% of its capital across eight businesses. These businesses span manufacturing, energy technology, agriculture, and consumer sectors and include the likes of Barracuda, Plentify, Cultura Fresh, FarmTrace, iG3N, AgrigateOne, and LHC Beauty. The investments have also resulted in the creation of more than 1,000 jobs in the process.
“Most investors provide capital and advice. We provide execution. By embedding the right operators next to founders, we turn strategy into results and potential into performance,” said Rushil Vallabh, co-founder of Secha Capital.
There is a persistent gap between the availability of capital for South African SMEs and their ability to put that capital to productive use, and with Fund II, Secha Capital wants to bridge that gap. Founded by Brendan Mullen, Nombuso Nkambule, and Rushil Vallabh, Secha relies on an operator-investor (OI) model where it embeds experienced professionals directly into its portfolio companies to provide hands-on support across sales, strategy, and operations.
The model is now being extended to include a dedicated chief executive operator-investor (CEOI) track that will act as a pathway to place senior professionals into leadership positions within portfolio companies. This suggests Secha is looking to go beyond financial backing and operational support and play an integral role in business building.
“We invest in the businesses people rely on every day, both today and in the future,” said Brendan Mullen, co-founder of Secha Capital. “By making these companies run better and grow faster, we deliver on a dual mandate of strong financial returns and systemic social impact.”
In a statement, E Squared Investments noted that its participation in Fund II aligns with its own focus to back businesses that contribute to job creation and economic development, where SMEs have struggled to scale in the past. “Secha’s model stands out because it is profoundly practical,” says Pyi Maung, Chief Investment Officer at E Squared Investments.
He adds, “It doesn’t just fund entrepreneurs; it provides the executive muscle needed to build resilient jobs‑creating businesses in the real economy. Importantly, it also offers a powerful learning opportunity, exposing us to an investment approach that can inform and strengthen the way we support and shape future ventures within the Allan Gray Fellows pipeline. This aligns perfectly with E Squared’s vision of patient, supportive capital.”
Secha Capital is targeting a final close of approximately $40 million (R650 million) for the fund by July 2026. The second close represents another step towards that goal and is inline with growing investor appetite for investments in SMEs as well as SME-oriented funds.
While the second close of the fund is news in its own right, the real takeaway is the rethink of Secha Capital’s approach to investment. By going beyond its proven operator-investor model, the South African impact investor is showing that you need more than capital to scale businesses in Africa and operational infrastructure is the real currency.
