LeapFrog makes first deal from Fund II

The impact investor has backed India's IFMR, as it continues its efforts to raise $400m for its second fund.

LeapFrog Investments, the ‘profit with purpose' investor, has agreed to invest $29 million for an undisclosed stake in India-based financial services business IFMR Capital, according to a statement.

IFMR Capital provides credit, insurance and other financial services to financially under-served households and businesses. It operates in more than 345 districts across 24 states in India.

The market for financing these types of businesses is expected to grow from $1.5 billion to $6.35 billion by 2020, LeapFrog said, adding that it will look to improve IFMR Capital’s structuring expertise, reach and relationships across financial products and sectors in India.

LeapFrog, which aims to deliver social as well as financial returns, focuses on financial services investments in growth markets. This is the first investment from its second fund, which is currently in market targeting $400 million and held a $204 million first close last September. The fund has already received commitments from a number of insurance companies including MetLife, Prudential Financial and Swiss Reinsurance Company, as well as banks and asset managers including JPMorgan and TIAA-CREF, according to an earlier statement.

LeapFrog’s first fund launched in 2009 and closed on $135 million. In December, the firm completed its debut exit in Africa by selling Ghanaian life insurer Express Life to Prudential.

LeapFrog’s portfolio companies currently provide insurance, savings and pensions products in countries such as India, Indonesia, Sri Lanka, Bangladesh, The Philippines, Ghana, Nigeria, Kenya and South Africa.

The firm is led by founder and president Andrew Kuper, co-founder Jim Roth, and six other partners.