Privately-held investment companies, such as PE and impact firms like Leapfrog, are adjusting their investment methods to cater to diversity and growth in the digital and market landscapes.
In the rapidly evolving landscape of essential service access in emerging markets, Leapfrog Investments has honed its strategy to focus on partnering with high-quality management teams and investing patient, growth-oriented capital in impactful sectors such as healthcare and financial services. The firm's goal is to support companies that deliver essential services to underserved populations, generate strong commercial returns, and achieve measurable social impact.
Recent successes for Leapfrog Investments include two successful exits: Fincare Bank and Goodlife Pharmacy, East Africa's largest pharmacy platform. The firm exited Fincare Bank through block deals, and sold its majority stake in Goodlife Pharmacy to CFAO.
India, with its deep and sophisticated capital market, presents a promising landscape for Leapfrog's investment strategy. The firm recognises the importance of partnering with resilient businesses in this environment, which enhances efficiency in recycling patient capital. Leapfrog's strategy supports companies capable of growth through economic cycles and benefits from India's robust exit environment. This is evident in the rising IPO and private equity exit values in India, with IPO exit values increasing by 78% year-on-year in 2024, according to Bain & Company.
Leapfrog's approach mirrors the broader theme of India's rapid transformation and financial inclusion acceleration. While Leapfrog invests directly in financial services companies to increase access for low-income consumers, India's manufacturing and technology sectors are also evolving with an emphasis on innovation, long-term patient capital, and technology adoption like AI and IoT. This environment aligns well with Leapfrog's strategy, as the firm seeks to back businesses that use technology to improve service delivery and inclusivity.
Pranav Kumar, Partner at Leapfrog Investments, believes that the demand from low and middle-income customers for essential services like financial services and healthcare is large and still underserved. The World Bank's Global Findex 2025 survey shows a 16-percentage-point increase in financial inclusion since 2021, with 40% of adults in developing economies now saving through financial accounts. Mobile-money adoption has also increased, with 10% of adults using such accounts to save.
Leapfrog's strategy also includes a climate investing approach to promote sustainable, clean pathways for low-income consumers. The firm successfully raised $808 million in its fourth flagship fund to accelerate impact businesses amid challenging markets, indicating strong investor confidence in this hybrid profit-and-purpose model.
In summary, Leapfrog’s investment strategy in response to rapid transformation and financial inclusion in India involves:
- Backing resilient, high-quality companies with strong management teams in healthcare, financial services, and climate solutions targeted at underserved populations.
- Providing patient and operationally active capital to support growth through economic cycles.
- Aggressively leveraging technology to enhance customer experience, profitability, and scalability.
- Raising significant funds to scale impact-driven businesses despite challenging market conditions.
- Capitalizing on India’s strong capital markets and exit opportunities to recycle investment capital efficiently.
- Promoting climate-conscious investments that provide clean and sustainable products to low-income consumers.
These elements collectively reflect Leapfrog’s dual focus on profit and purpose while responding to the fast-changing financial inclusion landscape and broader market transition in India and other emerging markets. Leapfrog remains committed to identifying resilient business models and high-quality partners, and will continue to back businesses that deliver commercial returns alongside achieving tangible social impact to the underserved population and small businesses.
[1] Leapfrog Investments Press Release, [Date] [2] Bain & Company Report, [Title], [Date] [3] S&P Global Data, [Title], [Date] [4] World Bank's Global Findex 2025 Survey, [Title], [Date] [5] Prince Kariappa, Contributor, [Media's Name], [Date]
- In India, where the capital market is deep and sophisticated, Leapfrog Investments recognizes the need for partnering with resilient businesses to ensure efficient recycling of patient capital, aligning with the country's focus on innovation and technology adoption in sectors like manufacturing and technology.
- Leapfrog Investments seeks to back businesses that use technology to improve service delivery and inclusivity in sectors like healthcare and financial services, ensuring growth through economic cycles and capitalizing on India's robust exit environment.
- Leapfrog's approach extends beyond financial services, as they also invest in climate solutions to promote sustainable, clean pathways for low-income consumers, evidenced by their successful $808 million fundraising for impact businesses.
- According to the World Bank's Global Findex 2025 survey, there has been a 16-percentage-point increase in financial inclusion since 2021, with 40% of adults in developing economies now saving through financial accounts and mobile-money adoption increasing.
- Leapfrog's strategy is driven by a commitment to identifying resilient business models and high-quality partners, with the goal of delivering commercial returns alongside achieving tangible social impact for underserved populations and small businesses in India and other emerging markets.
