Dealflow | July 5, 2022

LeapFrog backs Shubham to deliver housing loans for low-income buyers in India

Roodgally Senatus
ImpactAlpha Editor

Roodgally Senatus

ImpactAlpha, July 5 — LeapFrog Investments has invested in Gurgaon-based Shubham Housing Development Finance Company, a mortgage lender that launched in 2011 to give low-income families and workers in India’s informal economy access to affordable housing loans.

Most such first-time buyers don’t have the paperwork necessary for other mortgages. Shubham uses data collection, machine learning and other tech-enabled tools to underwrite its loans.

LeapFrog’s investment will help Shubham “deliver home ownership to thousands of low-income Indian families for the first time,” said LeapFrog’s Michael Fernandes.

Scaling up.

LeapFrog invested in Shubham’s $112 million investment round alongside British International Investment (formerly CDC Group), Asian Development Bank and Premji Invest. As part of the deal, LeapFrog, ADB and Premji will invest $78 million of primary capital in the business. LeapFrog and Premji will also acquire stakes from Elevar Equity and Motilal Oswal.

Market footprint

LeapFrog launched in 2007 to invest in companies delivering financial services (and later healthcare) in emerging markets in Asia and Africa. The company says its portfolio companies have reached 250 million low-income people, or people living on less than $11.20 a day (per the World Bank’s definition). “We’re particularly pleased that 186 million of those impacted are women and girls,” said LeapFrog’s Andy Kuper.

LeapFrog in March launched a new tool to help portfolio companies’ better deliver products and services to low-income customers (see, “LeapFrog’s ‘launchpad’ helps companies serve low-income consumers in emerging markets).