Emerging markets-focused LeapFrog Investments has held a first close on $204 million for its Financial Inclusion Fund II, according to a statement from the firm.
Fund II has a target of $400 million, according to a source familiar with the matter. LeapFrog launched the fund eight months ago and has received commitments from insurers including MetLife, Prudential Financial and Swiss Reinsurance Company as well as banks and asset managers such as JP Morgan Chase and TIAA-CREF, according to the statement.
LeapFrog’s second fund will have a wider financial services focus compared to its debut vehicle. Fund II will focus on investing up to $60 million in eight markets across Africa and Asia, including Indonesia, South Africa and Sri Lanka. In these countries, financial services growth is about 18 percent per year and 4x global nominal GDP growth, according to the firm.
“There are 1.9 billion emerging consumers in LeapFrog’s target regions, and their spending power is forecast to rise from $2 trillion today to $5 trillion in the coming decade,” LeapFrog president and founder Andrew Kuper said in the statement. “Financial services are crucial springboards for households and businesses, but access is very limited.”
Revenue at LeapFrog’s portfolio companies grew by an average of 25 percent during the 2012 calendar year. The firm’s businesses have reached more than 18 million people in 13 countries with financial services and products.
LeapFrog’s debut fund launched in 2009 and closed on $135 million. The fund had committed about 75 percent of its capital as of December.
Founded in 2007, LeapFrog is led by Kuper, co-founder Jim Roth, and six other partners. The firm is headquartered in Mauritius and has offices in Sydney, Johannesburg, Edinburgh, Singapore and Washington DC.