LeapFrog to accelerate India investments with $500 million partnership
- This is the first time Temasek is investing in LeapFrog. With this, LeapFrog would have received over $2 billion in commitments from global institutional investors
MUMBAI: Global impact investor LeapFrog Investments on Tuesday said it has signed a strategic partnership with Singapore’s state investor Temasek, which will see the latter commit $500 million as an anchor investor across multiple funds of LeapFrog.
With this partnership in place, LeapFrog plans to accelerate its investments in India, said Andrew Kuper, founder and CEO of LeapFrog Investments.
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Temasek will also take a minority stake in LeapFrog and provide growth capital to support expansion of the LeapFrog team and investment capabilities across Asia and Africa.
LeapFrog has deployed hundreds of millions of dollars in India, across nine companies to date. Current companies include MedGenome, Ascent Meditech, Northern Arc Capital, Fincare, Dvara, NeoGrowth and Magma. The firm has had successful exits from Mahindra Insurance Brokers Ltd and Shriram CCL, and partial exits from the likes of Northern Arc Capital and Magma Fincorp.
“We plan to accelerate our investments in India, investing hundreds of millions more capital over the medium term. Our team is actively looking for strong purpose-driven companies to invest in, whether it be in insurance, savings, pensions, payments, credit, banking or diverse kinds of healthcare,” Kuper told Mint.
"With over a billion people on the rise in India, there is an immense opportunity to drive what we call Profit with Purpose. These are consumers and producers, ready to succeed if only they can be well served.”
The firm typically invests $10-60 million dollars for either a significant minority or majority stake.
Kuper believes impact investments will be key to help lower income groups recover from the impact on covid-19 and thus the investment opportunity for impact investors will be significant in the near-to-mid term.
“Covid-19 has hit excluded and lower-income groups particularly hard. According to the World Bank, as many as 150 million people have been pushed into extreme poverty, creating an urgent need for a just and impact-led economy that serves all people. Government and charity are crucial, but the recovery will not happen without strong and scalable businesses, serving those people. They offer scalable solutions to deliver essential services efficiently, while accessing wide pools of capital from investors, due to attractive return profiles,” said Kuper.
“Today, LeapFrog’s companies reach 212 million people with essential services. Over 100 million of those people live in South Asia, overwhelmingly India. The strategic partnership with Temasek will accelerate LeapFrog towards our goal of reaching one billion people with essential services by 2030,” added Kuper.
This is the first time Temasek is investing in LeapFrog. With this, LeapFrog would have having received over $2 billion in commitments from global institutional investors.
“There is an urgent and pressing need to address the critical social and environmental challenges that the world is facing. We believe in the potential of impact investing to unlock the capital to meet these challenges. Our partnership with LeapFrog, with its focus on serving underserved markets, underscores Temasek’s commitment to investing for impact, and the contributions these investments make towards shaping a better world for our communities,” said Benoit Valentin, Head, Impact Investing, at Temasek.
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First Published:9 Mar 2021, 12:09 PM IST
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