ImpactAlpha, March 31 — The challenges of delivering essential products and services to customers in low-income and rural areas has kept many companies focused only on more affluent consumers.
LeapFrog Investments, which launched in 2007 to invest in companies delivering financial services (and later healthcare) in emerging markets in Asia and Africa, has a new tool to help its portfolio companies’ better deliver products and services to low-income customers.
Leapfrog’s CX (for ‘customer experience’) Launchpad program provides portfolio companies with expertise, guidance and mentorship to solve affordability and access issues. Software analytics help these businesses collect data to better serve their customers. LeapFrog is looking to have an impact on a billion low-income consumers by 2030, says LeapFrog’s Andy Kuper.
“We tap into our deep experience with emerging consumers and partner with our companies to build capabilities that dramatically enhance the end-to-end customer experience,” Kuper says in a new report, “Creating Impact with Customer Experience in Emerging Markets.”
Nearly a dozen Leapfrog portfolio companies are using CX Launchpad to date. Among them is India’s Dvara, a Chennai-based company that provides loans for low-income and rural borrowers. With LeapFrog’s tool, Dvara saw its loan volume growth double over the past year. Turn-around times for loan disbursement also decreased from 12 days to two days.
CX Launchpad “helped us understand where we were going wrong in terms of customer expectations and what we were providing or delivering,” says Dvara’s Lvln Murty. “We learned that due to the existing processes, the average time taken to disburse a loan was almost 12-14 days and this was the biggest obstacle for growth.”
Another example is Kenyan pharmacy chain Goodlife, which used CX Launchpad to attract members for a loyalty program that aims to help reduce health expenses for low-income patients in East Africa. The tool helped the Nairobi-based company increase membership in the program by 500% over the past 12 months.
LeapFrog, which first invested in Goodlife in 2017, this week sold a 30% stake in the company to CFAO Healthcare (formerly Eurapharma), a distributor of pharmaceutical products and medicine in over 23 African countries. After the sale, LeapFrog will remain Goodlife’s majority shareholder. Goodlife raised $12 million in debt from Proparco earlier this month.
Goodlife has expanded its pharmacy chain to nearly 100 locations in Kenya and Uganda, reaching 1.7 million people. The company plans to have more than 250 stores by 2025 and reach 8.5 million people.
“Goodlife will continue to work in marginalized areas, taking the same quality of care and providing products at the right price points for these markets,” says Goodlife’s Amaan Khalfan.
LeapFrog has raised over $2 billion to invest in high-growth businesses advancing financial inclusion and health equity, including a $500 million commitment from Temasek that makes the Singapore-based fund Leapfrog’s largest investor. Leapfrog is bringing on Dominic Barton, ex- of McKinsey, as chairman. The Ugandan-born Barton will help lead Leapfrog’s institutional fundraising.
Leapfrog reports it has impacted more than 270 million in 35 countries, 205 million of which are low-income consumers living on less than $10 per day. Last year, LeapFrog says, its portfolio companies paid out $533 million in insurance claims, deployed $16.2 billion in loans and provided more than 23 million pharmaceutical products.