Andy Kuper, Leapfrog Investments

LeapFrog Investments, the emerging markets impact investing pioneer, has passed an impact milestone having “reached over 500 million people with essential services”, the firm said on Monday.

In total 537 million have accessed a LeapFrog portfolio company product or service, of which 359 million of these customers are defined as low-income, earning less than $11.20 per day. The firm has historically invested in financial services and healthcare business; in 2022 it launched a climate strategy.

New Private Markets caught up with LeapFrog founder and CEO Andy Kuper to discuss the milestone. Here are some takeaways from the conversation:

  • The recent milestone represents 14x the original LeapFrog impact objective, which was to reach 25 million low-income people with essential services, said Kuper. “Achieving 14 times your original vision is pretty decent; we are pretty proud of if. I was holding back a tear with my team, thinking about what it has taken to get here in 17 years.”
  • Impact investing has entered a “new era in terms of scale and proof” in three different ways, said Kuper. First in terms of executing on the ‘profit with purpose’ thesis –  LeapFrog reports average portfolio company revenue growth of 23 percent per year over the firm’s lifetime and that 91 percent of the companies in its third flagship fund are profitable. Second, in terms of industry development: the large asset managers who have entered the space “don’t do things entirely for love and impact”, said Kuper, “they do things because it raises capital and it generates robust risk-adjusted returns”, Third is the arrival of more capital from “long-term allocators”, such as pension funds, into impact.
  • While LeapFrog started with the backing of predominantly US and European investors, Asia has become an important investor geography. The firm is partly owned by Singaporean investor Temasek and has received backing from AIA. “There’s a new level of focus; we are seeing impact investing in Asia really taking off,” said Kuper, who also notes increased interest from Australian and Middle Eastern institutions.