Small logo Subscribe to leading news on impact investing. Learn More
The Brief Originals Dealflow Signals The Impact Alpha Impact Voices Podcasts Agents of Impact Open
What's Next Capital on the Frontier Measure Better Investing in Racial Equity Beyond Trade-offs Impact en las Americas New Revivalists
Local and Inclusive Climate Finance Catalytic Capital Frontier Finance Best Practices Geographies
Slack Agent of Impact Calls Events Contribute
The Archive ImpactSpace The Accelerator Selection Tool Network Map
About Us FAQ Calendar Pricing and Payment Policy Privacy Policy Terms of Service Agreement Contact Us
Locavesting Entrepreneurship Gender Smart Return on Inclusion Good Jobs Creative economy Opportunity Zones Investing in place Housing New Schooled Well Being People on the Move Faith and investing Inclusive Fintech
Clean Energy Farmer Finance Soil Wealth Conservation Finance Financing Fish
Innovative Finance
Personal Finance Impact Management
Africa Asia Europe Latin America Middle East Oceania/Australia China Canada India United Kingdom United States
Subscribe
Features
Series
Themes
Community
Data
Subscribe Log In
More

Leapfrog’s Andy Kuper on impact, exits and scaling growth in emerging markets through the COVID crisis (podcast) 



LeapFrog Investments goes into this recession with capital on hand, the fortuitous result of having raised more than $700 million for its third fund last year. 

That’s a stark contrast to the last recession, when LeapFrog launched its first fund a week after the collapse of Lehman Brothers in 2008. The emerging market impact investor went on to raise $135 million and prove out its thesis that rising middle classes in Asia and Africa would increasingly demand “wealth and health.”

CEO Andy Kuper said the COVID pandemic has strengthened LeapFrog’s investment thesis of “profits with purpose,” at least on a relative basis. The shrinkage in emerging markets, though hit hard by pandemic-related shutdowns, is forecast to be less severe than the downturn in more developed economies, according to the World Bank’s recent Global Economic Outlook

“There’s no reason why those billions of consumers rising and emerging Asia and Africa are not going to continue to demand” insurance, health care and financial services, Kuper said in an interview on ImpactAlpha’s latest Returns on Investment podcast. “We have every reason to believe that the thesis of investing in companies serving emerging consumers is only going to amplify in the coming years, especially if you take the digital dimensions into account.”

LeapFrog and Goldman back African fintech Jumo’s $55 million raise

LeapFrog now manages a total of $1.6 billion. Some among the firm’s two dozen portfolio companies already are demonstrating that growth. Goodlife Pharmacy, in East Africa, for example, has become one of the region’s largest healthcare providers. WorldRemit, which specialized in international transfers to mobile money accounts, has quintupled its customer base since LeapFrog invested two years ago.

Kuper says in addition to upside growth potential, positive impact also provides a cushion against downside risk. “If you’re highly customer centric, and you’re working in a market of billions of customers rising, you’re going to be stickier with those customers. You’re going to have the support of regulators.” he said.

LeapFrog leads $55 million investment in MedGenome to expand genetic testing

The thesis has been effectively validated by large insurers and financial services companies like Prudential Financial and Axa, which are LeapFrog investors, and Standard Chartered and Fidelity, which have bought out LeapFrog’s shares in portfolio companies as part of their own emerging market growth plans. 

When he launched LeapFrog, Kuper committed to reaching 25 million low-income customers by the end of 2019. The company’s recent impact report, the company says its portfolio companies reach 205 million people, 164 million of them low-income. For the next decade, Kuper has raised the firm’s ambition: to reach one billion people by 2030

“If you look at how that is done, it is fundamentally by growing successful scaled companies,” Kuper said. Small may be beautiful but, increasingly, digital technology means many great ideas can be “super-scaled,” he says.

“That’s the ambition that I sometimes think is lacking in parts of the impact investing ecosystem,” Kuper said. “Impact investing has to be the lever that’s long enough to move to this world. And this world has 4 billion low-income people in it. So we really need to focus on what are those companies that are going to serve 10s of millions of people with quality, affordable products and make sure they get the support they need.”

The 10x challenge: Pandemic is a chance for impact investors to step up by an order of magnitude – or more  


Catch up on all of ImpactAlpha’s podcasts, including our weekly Impact Briefing.

You might also like...