Mumbai: LeapFrog Investments, an Asia- and Africa-focussed impact investment fund, on Friday said it would will receive up to $200 million from the Overseas Private Investment Corp. (OPIC), the US government’s development finance institution.
LeapFrog has been investing in Indian companies since it raised its first fund in 2009. This year, the impact fund invested Rs.200 crore in Kolkata-based non-banking finance company Magma Fincorp Ltd and about Rs.58 crore ($9 million) in financial inclusion service provider IFMR Holdings Pvt. Ltd.
LeapFrog’s other investees in India include companies such as Mahindra Insurance Brokers Ltd, Shriram Credit Co. Ltd and IFMR Capital.
Impact investors put money into companies with the objective of making a beneficial social impact alongside earning financial returns.
The commitment from OPIC will go towards a third fund that Leapfrog plans to raise. In 2009, Leapfrog Investments raised its first fund with a corpus of $135 million. In 2014, it announced the final close of its second fund with a corpus of $400 million.
This is the largest commitment in history to any impact fund manager and also the single-largest commitment made by OPIC to a private equity manager, LeapFrog said in a statement.
With OPIC’s announcement, the commitments to LeapFrog have now crossed over $1 billion, the fund said.
LeapFrog plans to invest the capital in financial services and healthcare companies, in both Africa and emerging Asia.
“By focusing on these underserved markets, LeapFrog portfolio companies recorded a 60% average revenue growth last year, and now serve 51.8 million people,” the statement said.
Other major investors in LeapFrog’s funds to date include American International Group Inc., JPMorgan Chase and Co., MetLife Inc., Prudential Financial Inc., Alliance Trust Plc, AXA SA and Swiss Re AG as well as development finance institutions such as the International Finance Corp., Germany’s DEG and the Netherlands’ FMO.
“This commitment marks a transformative moment for impact investing,” said Andrew Kuper, founder and chief executive of LeapFrog.
“OPIC’s vision and capital are a magnet for other leading institutions, revealing how to invest in companies that reach billions of underserved consumers,” he said.
The World Bank estimates that over 4 billion people worldwide are earning under $10 per day in purchasing power parity. This population is rising toward the middle class, but lacks access to essential financial tools and healthcare services, the statement said.
