The investment firm, LeapFrog Investments, focuses on impact. It thus far successfully raised over $1.15 billion for its flagship social impact strategy, beating its original target of $1 billion for its fourth fund, Fund IV. Its latest fund stands at $1.02 billion in commitments and should help access 100 million lower-income people in emerging markets through healthcare and financial tools. It is a milestone announcement for LeapFrog, since 2008 with an investment that has focused on businesses in growth markets, primarily in Asia and Africa. LeapFrog’s core areas of focus- healthcare, financial services, and climate solutions- are among the industries most prominent in growth markets around the world.
Andy Kuper, the founder and CEO of LeapFrog Investments, expressed immense pride in the firm’s fundraising efforts, calling it “phenomenal” given the challenging conditions of recent years. The private equity market has faced one of its most difficult fundraising cycles in the last century, with 2023 seeing the lowest capital raised in the past six years. Despite the challenges, LeapFrog has managed to carve out its niche by focusing on local sourcing, deep industry insights, and strong impact management strategies that result in meaningful impact. This has made it a magnet for institutional investors from all regions, many of whom are coming from completely new ones, and has established LeapFrog as a pioneer in the “Profit with Purpose” investment model.
So far, Fund IV has been able to invest in five companies across Asia and Africa that could potentially help 24 million people. Among the recipients of the investment are Redcliffe Labs, an Indian diagnostics leader, and Sun King, the world’s largest financier for off-grid solar. Sun King has enabled 118 million people to have access to solar energy, saving low-income households more than $7.2 billion in what would have been additional expenses in biomass, kerosene lamps, and generators using diesel. Other investments by Fund IV include bolttech, an insurtech innovator; Electronica Finance; and Auxilo Finserve, each of which operates pioneering technology and services in emerging markets.
LeapFrog’s success in raising Fund IV rests squarely on the solid support of cornerstone investors, including major institutional limited partners like Temasek, AIA, Prudential Financial, and development finance institutions, such as the European Investment Bank and the U.S. International Development Finance Corporation. The fund attracted huge commitments from global asset managers like Sumitomo Mitsui Trust Bank and Van Lanschot Kempen, as well as healthcare-focused investors such as Eli Lilly and Company. Foundations and endowments like the Ford Foundation and the IMAS Foundation helped play a crucial role in raising capital. The diversity of investors and the broadening of LeapFrog’s investor base into new markets, including Singapore, China, Japan, Austria, Norway, Oman, and Turkey, reflect the growing global interest in the firm’s impact-driven approach.
Dominic Barton, Chairman of LeapFrog Investments, emphasized the importance of the firm’s mission and its ability to attract committed, socially responsible investors who are commercially astute. He said faith and trust with the investors enabled the firm to expand the reach of its impact initiatives. As reported by Barton, Fund IV is going to be an important fund for scaling innovative businesses in financial services as well as healthcare because future prosperity and economic resilience for emerging consumers in developing regions will start from that firm.
Such high levels of funds garnered by LeapFrog, totaling over $1.15 billion, amid a tough fundraising climate, only go to show that impact investing is gaining as a real alternative in addressing the world’s most pressing social and environmental problems. The company is looking forward to continuing the betterment of access to health and financial services for underserved populations with Fund IV. The approach the firm adopted, balancing pursuit of high financial returns and driving measurable social impact, positioned it as a leader in the field of impact investing. Such success for this fundraising cycle also relates to increasing demand from institutional investors for strategies that align with their social responsibility objectives, as well as growing interest in high-growth emerging markets critical to global economic development.
These investments in the emerging markets will continue to scale as LeapFrog maintains its focus on empowering people in disadvantaged regions, providing them with the tools necessary to advance their quality of life. The companies of Fund IV are therefore bound to create a pivotal difference in the lives of millions as part and parcel of that broader goal of sustainable and inclusive economic growth in some of the world’s most dynamic and rapidly changing regions.