Temasek Holdings is allocating US$500 million to global impact investor LeapFrog Investments, in a partnership that marks the largest ever commitment to an impact investor.
In a joint statement on Tuesday (9 Mar), Temasek said the strategic partnership will take the form of a multi-fund investment by the Singapore state-backed investment company to anchor LeapFrog’s future funds.
The company will also acquire a minority stake in LeapFrog and provide growth capital to support the expansion of the LeapFrog team and investment capabilities across Asia and Africa.
“There is an urgent and pressing need to address the critical social and environmental challenges that the world is facing. We believe in the potential of impact investing to unlock the capital to meet these challenges,” said Temasek’s head of impact investing Benoit Valentin.
“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,” he added.
Temasek stated that it will take one non-executive seat on LeapFrog’s management board, while LeapFrog and its investment process continue to be managed and controlled by its team of partners.
With this funding, LeapFrog said it will receive over US$2 billion from global institutional investors since it was founded in 2007.
The firm said its companies, which have expanded on average at 30 per cent per year and employed more than 130,000 people, now reached more than 210 million people with healthcare or financial services.
Dr Andy Kuper, the founder and CEO of LeapFrog, said the company will continue to “open the gates of the capital markets to purpose-driven businesses”.
“When we launched LeapFrog, the impact industry did not exist, but we believed that profit with purpose was the future of business and investment.
“For almost 15 years, we have worked to build a values-driven firm, co-creating a thriving industry that now stands at US$715 billion and is projected to grow to up to US$26 trillion,” he noted.
With the partnership with Temasek, LeapFrog plans to accelerate its investments in India, as reported by Mint.
“We plan to accelerate our investments in India, investing hundreds of millions more capital over the medium term. Our team is actively looking for strong purpose-driven companies to invest in, whether it be in insurance, savings, pensions, payments, credit, banking or diverse kinds of healthcare,” it told Mint.