Growing up attending the only non-segregated school in South Africa under Apartheid rule, Andy Kuper was exposed to inequality at a young age. The inauguration of Nelson Mandela as the country’s president in 1994 cemented a desire to make as big a difference as possible with his career.
In 2007, Kuper launched LeapFrog Investments, an impact investment fund that was one of the first to adopt the term “profits with purpose.” Kuper’s idea: use capital and entrepreneurship to support projects that nonprofits and philanthropy couldn’t, at least not as fast. “My constant frustration was that the scale of exclusion and poverty was not matched by the solutions,” says Kuper, LeapFrog’s CEO. “ If you are trying to serve billions of people, you will need trillions of dollars. Charity is incredibly important, and development aid is incredibly important, but it’s far from enough.”
In the 14 years since, Kuper’s raised three funds focused on growth-stage investments in financial services and healthcare companies combating poverty in Asia and Africa, work he says has reached 250 million people. All the while, LeapFrog’s assets under management have swelled to $1.8 billion.
Now LeapFrog’s secured a commitment to raise one of the largest sums ever for impact investment from a single limited partner. Singapore state investment company Temasek has committed $500 million to LeapFrog, the companies announced, to anchor multiple future funds. Temasek will also take a minority stake in LeapFrog itself to help the firm expand its investing team, as well as a non-executive director seat on its board.
According to Kuper, Temasek’s promise is the largest-ever made by one LP to an impact investment firm. It also represents a cementing of Temasek’s interest in the category, which was informal at the $306 billion-in-assets money manager until now. “I think that with the wealth of network and intention, and the experience of both Temasek and LeapFrog, there are a lot of things we can really learn from each other and achieve together,” says Benoit Valentin, Temasek’s head of private equity fund investments, impact investing, and deputy head of its Europe, Middle East and Africa regions.
Since its inception, LeapFrog claims to have helped create more than 130,000 jobs for those in poverty thus far. And while the impact investing category has expanded in recent years, with at least 800 firms now tackling an opportunity that some estimate to reach $1 trillion, the pandemic saw many such efforts slow down or even take a step backward. At LeapFrog, Kuper estimates that 150 million people globally fell into poverty due to the spread of Covid-19. “The need for these highly scalable solutions that empower people is more significant than it was a while back,” he says. “Part of why we are taking the investment from Temasek is to grow and meet more people, because we don’t have time to waste.”