IFC backs Africa-focused LeapFrog PE fund with $50m

AFRICAN STOCKS AND FINANCEOctober 11, 2023 at 11:25 PM UTC

The International Finance Corporation (IFC) is set to invest $50 million in the LeapFrog Emerging Consumer Fund IV LP, which aims to secure $1 billion in commitments and represents LeapFrog's largest offering to date.

IFC's investment joins forces with several notable investors, including the Singaporean sovereign wealth fund Temasek, global insurance strategists AIA and Prudential Financial, and global asset managers such as Van Lanschot Kempen.

IFC's commitment to the fund includes an additional $50 million, enabling selective co-investments with the fund in LeapFrog's portfolio companies. This marks IFC's third engagement with LeapFrog, building upon a $20 million investment in LeapFrog's initial fund and a $45 million investment in its third fund. Moreover, IFC will collaborate with LeapFrog to enhance gender diversity at both the fund manager level and the companies the fund invests in.

Key Takeaways

Many small businesses in Africa continue to face a substantial challenge when it comes to accessing capital. The data available indicates a financing deficit of $330 billion for the small enterprises that constitute 90% of businesses across the continent. This challenge has not gone unnoticed, and it's drawing the attention of startups and foreign investors who see it as an opportunity to address this issue while also potentially reaping attractive returns on their investments. LeapFrog's focus lies in investing in healthcare, financial services, and climate solutions enterprises within rapidly growing global markets. These companies deliver substantial impact and robust returns, averaging a 24% annual growth rate. The latest fund concentrates on fostering businesses in healthcare and financial services by facilitating the adoption of digital solutions and introducing new products targeting underserved population segments.