The London-based firm, which has pumped in an estimated $200 million in local ventures, may look to allocate as much as 20% of its third fund – a $750 million investment vehicle to India.
LeapFrog Investments, one of the largest impact investors globally, strategizes to rollout investments to India, as it looks to scout for more deals in the wake of the Covid-19 pandemic.
In an exclusive interaction with ET, Andrew Kuper, founder and chief executive of the investment firm which manages assets of about $1.5 billion, said LeapFrog will invest more into Asia’s third-largest economy than what it has done historically.
“We plan to put more capital into India, and increase the amount beyond what we have historically put in. The digital evolution in India has been massively accelerated by the telcos, in particular, Jio. The context of a strong entrepreneurial ecosystem, and a highly-accelerated digitisation, along with now Covid-19, has created a vast opportunity to reach out to lower-income people, and the last mile, which is real India,” Kuper told ET over phone.
This comes at a time when the pandemic has ravaged economies across the globe, with the Indian economy also contracting sharply and its gross domestic product (GDP) growth expected to contract by more than 6%, according to some brokerages.
“This is absolutely a difficult period for India, as well as for a number of countries in which we invest, and one shouldn’t understate just how hard and grave the conditions are for many families and for a lot of business…We remain, both short-term and long-term, committed to India. In some instances, Covid-19 also creates opportunities to have an impact, and to make good investments,” Kuper said.
“We don’t, typically, do early-stage venture capital deals. We are a much more early-growth and growth investor, helping companies go from serving hundreds of thousands of customers, to millions of them,” Kuper said.
LeapFrog primarily invests in companies operating in the broader healthcare and financial services sectors but is now looking to widen its scope across sectors, according to Kuper. While it will continue to back companies operating in the insurance sector, where it has struck notable exits, it will also scout for opportunities in diagnostics, remittances and digital payments.
“LeapFrog, these days, typically invests between $10 million and $70 million in a company, and can also bring in co-investments. Therefore, we could invest well over $100 million. So, we have our net out to catch a good, bright partner,” Kuper said.