LeapFrog Investments’ Emerging Consumer Fund IV is expected to close on Feb. 29, 2024, and the London-based impact investing firm said it is nearing its $1 billion target with support from global investors and asset managers, development finance institutions and endowments and philanthropies.
Launched in 2007 by serial entrepreneur Dr. Andrew Kuper, LeapFrog bills itself as “the Profit with Purpose firm”and established its impact investment credentials partly by playing key roles in drafting the IRIS impact management metrics and the International Finance Corporation/World Bank Group’s Operating Principles for Impact Management. The firm invests primarily in Africa and Asia and has offices in Singapore, Australia, South Africa and three other African countries.
Launched in May, Fund IV is a growth equity vehicle focused on rapidly scaling financial services and healthcare businesses in global growth markets. One of the lead backers has been Temasek, which committed $500 million to LeapFrog and its growth equity funds in 2021. “Our partnership with LeapFrog is one of the core pillars of our impact investing strategy and underscores our belief in the potential of impact investing to unlock capital that can help address critical social and environmental challenges in emerging markets,” said Benoit Valentin, head of impact investing at the Singapore government-owned investor.
Other key investors include Prudential Financial, which has committed more than $500 million to LeapFrog since 2016; Netherlands-based Van Lanschot Kempen and other asset managers; and AIA, the largest life insurer in Asia, which made an allocation to support Fund IV as well as future investments. “As we deepen our commitment to ESG and corporate responsibility, we believe partnering with a world leader in impact investing can accelerate AIA’s ambitions across Asia,” said Mark Konyn, group CIO at AIA, who added that the company is developing a shared knowledge base to improve its internal investing frameworks and boost its efforts to achieve the UN Sustainable Development Goals.
Two longtime LeapFrog backers — the International Finance Corporation and the European Investment Bank — have committed $50 million and $60 million, respectively, to Fund IV. The Ford Foundation and other endowments and foundations have contributed undisclosed amounts.
The Fund IV has already completed three impact investments. In September, the fund completed a $50 million extension to Singapore-based insurtech unicorn Bolttech’s Series B round. In December 2022, the fund led a $70 million Series D extension for Kenya-based Sun King, the largest provider of off-grid solar energy for homes in Africa and Asia. And in May 2022, the fund led a $61 million round for Redcliffe Labs, a mobile diagnostics chain that has quickly grown a network of over 80 labs and 2,000 collection centers across India.
Investments made by the fund’s predecessor, Fund III, include fintech unicorns Zepz and CarDekho and healthcare innovators such as MedGenome and HealthifyMe. Fund III’s track record also includes successful partial exits in the past year from East African pharmacy chain Goodlife Pharmacies to the healthcare division of the Toyota Group’s CFAO Group.
“There has never been a more exciting time to raise a new impact fund,” said LeapFrog Founder and CEO Dr. Andy Kuper. “The world’s four billion emerging consumers are rising in incomes and prosperity, and we need to make sure that growth is sustained, inclusive and green.”