Real Leaders

Investing For Impact

Photo by Simon Abrams on Unsplash

Founded by entrepreneur Andrew Kuper and launched with President Bill Clinton in 2008, LeapFrog set out to reach 25 million vulnerable people, including 15 million women and children, within 10 years. In just 3.5 years, LeapFrog’s portfolio companies have reached nearly 10 million people in emerging markets – 70% of them women and children – providing millions of families a financial safety net and springboard to escape poverty. According to President Clinton, “LeapFrog’s team is widely recognized as having opened up a new frontier in microfinance and alternative investment.”

Since their launch in 2008, they have become a global leader and pioneer in the impact investing movement, with distinctive success at scale: their average deal size of $12 million is roughly 8x the industry average. Their unique business model, a team across four continents and a community of influential stakeholders has created a company that can operate at the scale necessary to make a dent in mass poverty. Both sustainability and social justice are central to LeapFrog’s vision.

They have simultaneously played a major role in creating a new asset class, offering diversification and top quartile investment returns, and opened the gates of the capital markets to innovative pro-poor companies. Not surprisingly, LeapFrog’s portfolio companies have shown strong financial performance while serving the “next billion” rising consumers. In addition, an accelerated growth trajectory at their portfolio companies increases employment directly and indirectly, supporting over 30,000 jobs and livelihoods.

Sustainability for Kuper is not an afterthought; rather, it’s at the centre of his company’s investment strategy. Ultimately, Kuper’s vision is for LeapFrog’s profit-with-purpose model to lead the way in developing a more catalytic, inclusive, and sustainable capitalism. His goal is to match the size of the problem – 4 billion people in poverty – with a transformative solution.

A solution that creates businesses that can scale, reach vast numbers of low income people and mobilize trillions of dollars from capital markets. Families that lose their only productive asset, such as their home or their sole income-earner, usually fall into poverty with no safety net under them. The efforts of many years can be wiped out in a single tragic day. For this reason, it’s no wonder that insurance and savings are the two most demanded financial products among low-income people worldwide.

Yet, financial tools are more than simply protective, they are also enabling, providing springboards that can break the cycle of poverty. People who are secure will make different daily choices; families can expand their horizons, from grappling with daily fears to longer-term investments. Impact investment is often unable to attract pure financial investors such as major reinsurers and global banks.

LeapFrog has bucked this trend by demonstrating that to achieve social impact, we need not accept a smaller financial return. They have shown that social and financial return are mutually reinforcing.

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