$500m deal between Leapfrog and Temasek marks ‘new level of scale’ for global impact investing
A new partnership struck by Australia-based impact investment group LeapFrog Investments reflects a “new level of scale” for impact investing, according to industry leaders.
Singapore state-backed investment company Temasek has announced a US$500m deal with LeapFrog, which backs businesses in Africa and Asia. The partners claim it is the largest ever single commitment to an impact investor.
The strategic partnership will take the form of a multi-fund investment by Temasek to anchor LeapFrog’s future funds. Temasek will also take a minority stake in LeapFrog and provide growth capital to support the expansion of the LeapFrog team and investment capabilities, and will take one non-executive seat on LeapFrog’s management board.
Amit Bouri, CEO and co-founder of the Global Impact Investing Network, said the commitment reflected “a new level of scale for the global impact investing industry”.
He added: “World-leading investors are prioritising measurable impact alongside financial returns, demonstrating that each can enhance the other.”
Benoit Valentin, head of impact investing at Temasek, which has US$214bn in assets, said there was an “urgent and pressing need” to address social and environmental challenges. “We believe in the potential of impact investing to unlock the capital to meet these challenges. Our partnership with LeapFrog, with its focus on serving underserved markets, underscores Temasek’s commitment to investing for impact, and the contributions these investments make towards shaping a better world for our communities.”
The $500m committed by Temasek takes the total raised from institutional investors by LeapFrog since 2007 to more than $2bn. LeapFrog-backed companies now employ over 130,000 people and reach 212m people with healthcare or financial services. The firm aims to reach 1bn people by 2030.
Andy Kuper, founder and CEO of LeapFrog, said: “Through this landmark commitment, Temasek joins in our vision to build an enduring and exemplary investment institution. We will continue to open the gates of the capital markets to purpose-driven businesses.”
LeapFrog companies have grown on average at 30% annually from the time of investment. Among its current companies are digital payments company WorldRemit; GoodLife, one of the largest pharmacy chains and healthcare providers in Africa; and BIMA, a digital insurance and health provider.
Kuper told the Financial Times that he did not expect the record set by LeapFrog and Temasek to last long. “The dam has burst and I expect to see more institutional investors making commitments of at least $1bn to impact investing,” he said.
Bouri said it was now “imperative” that investors “step up the scale of capital they are deploying” to improve the lives of billions of people.
Header image: A pharmacist at LeapFrog investee GoodLife serves a Kenyan customer (credit: LeapFrog Investments)
Thanks for reading our stories. As an entrepreneur or investor yourself, you'll know that producing quality work doesn't come free. We rely on our subscribers to sustain our journalism – so if you think it's worth having an independent, specialist media platform that covers social enterprise stories, please consider subscribing. You'll also be buying social: Pioneers Post is a social enterprise itself, reinvesting all our profits into helping you do good business, better.