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LeapFrog Investments, a private equity firm with interests in the financial and healthcare sectors, plans to raise $1 billion for a new fund targeting businesses in “global growth markets” including Africa.
The Emerging Consumer Fund IV, scheduled for final close in February next year, has already secured the backing of a number of institutional investors, including the European Investment Bank (EIB) and the World Bank’s IFC, which have committed $60 million and $50 million respectively. Have promised.
Other Fund IV limited partners (LPs) include US-based financial services company Prudential Financial and Hong Kong-based insurer AIA Group, which have committed multi-fund investments of $500 million and $200 million, respectively. Singapore-based investment firm Temasek pledged $500 million to LeapFrog’s fund in 2021, including the existing one.
LeapFrog said it would make initial investments of between $30 million and $70 million in 18 to 20 high-growth businesses. It will target healthcare and financial services businesses in Africa, where it will allocate about 40% of the funding, according to IFC disclosures. It is also eyeing investments in South Asia and South East Asia.
Daniel Stacey, global head of external affairs at LeapFrog, told TechCrunch: “The fund will seek to take a control-oriented significant minority or majority stake in 18-20 opportunities. LeapFrog’s investment is a commitment to true partnership. We actively employ our knowledge and experience to raise our own capital as well as support the leadership teams and boards of those businesses, including through follow-on funding. We help leaders and owners meet their ambitious growth, profitability and impact goals.
LeapFrog began deploying Fund IV last year and has so far invested in Sun King, one of Africa’s largest off-grid solar power companies, which raised a $330 million Series D last year. Sun King Lite provides pay as you go solutions for systems that power home appliances such as mobile phones and TVs. Fund IV has also invested in India’s mobile diagnostics chain, Radcliffe Labs and insurtech unicorn BoltTech.
In Africa, LeapFrog’s other portfolio companies include South African fintech Jumo, Nigerian payments company Interswitch and Kenyan chain drugstore Goodlife Pharmacy and cardiac and orthopedic equipment distributor Pyramid Group.
Financial services companies targeted by PE firms include companies providing life insurance and wealth management, banking and credit, or digital financial services. According to the disclosure, in the healthcare sector, LeapFrog is keen on diagnostics, wellness and chronic care managers, retail pharmacies, single-specialty providers, manufacturing and distribution of medical devices, and digital health.
Stacey says LeapFrog has focused on impact investing over the past 15 years to help low-income consumers build better lives, with an initial focus on financial inclusion, before expanding to include health care six years ago. I went. He said LeapFrog sees growing opportunities in these areas.
“The incredible penetration of smartphones in low-income populations, coupled with falling data prices, has helped drive down the cost and accelerate growth of digital financial services in our key markets. Similarly, the health care story in the developing world has accelerated in recent years, as the epidemic of lifestyle-related diseases has led to a revolution in consumer healthcare and preventive medicine, all through digital delivery and AI-assisted treatment models. “It has been accelerated by the recovery,” he said. ,
“These are trillion-dollar opportunities, and we see the growth path extending over many decades.”
