The partnership will see Temasek pump in $500 million in LeapFrog’s funds in lieu of a minority stake as it gears up to provide growth capital to companies across Asia and Africa.
In a way, the partnership will see a multi-fund investment strategy by Temasek as it becomes an anchor investor in LeapFrog’s funds.
Following the partnership, Temasek will have one non-executive seat on LeapFrog’s management board. However, LeapFrog and its investment process will continue to be managed and controlled by its team of partners.
Temasek’s partnership with LeapFrog is in line with the firm’s commitment to ramp up its impact investment.
“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,” said Benoit Valentin, head, impact investing at Temasek.
LeapFrog has so far received over $2 billion from global institutional investors since its inception in 2007. The firm manages four private equity funds so far and claims that its portfolio companies have grown on an average 30 per cent per year.
“We believed that profit with purpose was the future of business and investment. For almost 15 years, we have worked to build a values-driven firm, co-creating a thriving industry that now stands at $715 billion and is projected to grow to up to $26 trillion,” said Andy Kuper, founder and CEO at LeapFrog.
Following the recent partnership with Temasek, Leapfrog also plans to accelerate its investments in India by investing hundreds of millions over the medium term, Kuper said as reported by Mint.
LeapFrog will actively scout for strong purpose-driven companies for investments in insurance, savings, pensions, payments, credit, banking and healthcare sectors. The company usually invests around $10-60 million for a significant minority or majority stake in each target.
So far, LeapFrog has invested in nine companies in India. Its current portfolio includes MedGenome, Ascent Meditech, Northern Arc Capital, Fincare, Dvara, NeoGrowth and Magma. Its previous exit records include Mahindra Insurance Brokers Ltd and Shriram CCL. It has so far made partial exits from Northern Arc Capital and Magma Fincorp.
In the global market, LeapFrog has helped scale a slew of digital companies that have then been sold to the likes of Prudential Plc, Allianz X, Swiss Re, Fidelity’s Eight Roads and Standard Chartered.
Its current portfolio across the world includes WorldRemit, the fast-growing cross-border digital payments company, GoodLife, one of the largest pharmacy chains and healthcare providers in Africa, and BIMA, the digital insurance and tele-health provider across global growth markets.
Founded in 2007, LeapFrog’s companies now reach 212 million people across 35 countries with healthcare or financial services.