Private Equity and Impact Firms such as Leapfrog are tailoring their investment strategies to account for ongoing digital and market transformations, with an emphasis on fostering inclusivity in growth.
In the ever-evolving landscape of private equity (PE) and impact investing, firms like Leapfrog Investments are leading the charge, particularly in emerging markets such as India and Africa. According to Prince Kariappa, a contributor with opinions expressed in this article, this strategic shift is driven by the unprecedented advancement of financial inclusion and the growing demand for essential services like financial services and healthcare from low and middle-income populations.
The World Bank's Global Findex 2025 survey reveals that financial inclusion has progressed at an unprecedented pace, with 40% of adults in developing economies now saving through financial accounts. Mobile-money adoption has been a key driver, with 10% of adults using such accounts to save. These trends have opened up a vast opportunity for PE firms like Leapfrog to invest in high-growth, impact-driven companies serving these underserved populations.
Leapfrog's strategy, as outlined by Pranav Kumar, a Partner at the firm, is to partner with quality management teams, fund and execute growth through economic cycles, and aggressively leverage technology to drive economics. This approach has seen Leapfrog back fintech, healthcare, and other sectors that offer both strong financial returns and social impact.
The success of this strategy is evident in Leapfrog's recent exits. The firm successfully exited Fincare Bank through block deals, and sold its majority stake in Goodlife Pharmacy, East Africa's largest pharmacy platform, to CFAO. These exits demonstrate that high-impact investments in traditionally underfunded sectors like healthcare can be commercially successful, thereby encouraging more private capital flows into emerging markets.
India, in particular, has seen a surge in PE activities. In 2024, it was the largest exit market in the Asia-Pacific region, with IPO exit values up 78% year-on-year, according to Bain & Company. This growth aligns with Leapfrog's focus on India, where the resilient economy and deep capital market provide a fertile ground for growth.
Kumar remains upbeat about the sustained long-term growth of Indian businesses, emphasizing the importance of identifying resilient business models and high-quality partners. Leapfrog will continue to back businesses that deliver commercial returns alongside achieving tangible social impact to the underserved population and small businesses.
The key trends like digitization (and now AI), smartphones, and public digital infrastructure have allowed smart-driven entrepreneurs to build solutions to serve this demand at low cost. These trends, combined with Leapfrog's strategic approach, are shaping the future of private equity and impact investing in emerging markets.
This article is published by India, an international franchise of Media.
References: 1. Leapfrog Investments 2. Leapfrog Investments' Growth Equity Strategy Drives Rapid Portfolio Growth 3. Leapfrog Investments Announces Successful Exits from Goodlife Pharmacy and Fincare Bank 4. Leapfrog Investments: Proving That Inclusive Growth and Impact Investing Can Coexist with Financial Performance
- Leapfrog Investments' strategic focus on partnering with quality management teams, investing in high-growth, impact-driven companies, and leveraging technology has seen them invest in sectors like fintech, healthcare, and others that offer strong financial returns and social impact.
- The success of Leapfrog's strategy is exemplified by their recent exits, such as the successful sale of their majority stake in Goodlife Pharmacy and the block deals on Fincare Bank.
- These exits demonstrate that high-impact investments in traditionally underfunded sectors like healthcare can lead to commercially successful outcomes, thereby encouraging more private capital flows into emerging markets.
- The growth of PE activities in India, particularly in 2024 when it was the largest exit market in the Asia-Pacific region, aligns with Leapfrog Investments' focus on this market due to its resilient economy and deep capital market.
- The trends of digitization, smartphones, and public digital infrastructure, combined with Leapfrog Investments' strategic approach, are shaping the future of private equity and impact investing in emerging markets like India.
