London 17 July 2018:
LeapFrog Investments (“LeapFrog”), the leading investor in companies that deliver healthcare and financial services for emerging consumers, has acquired a majority stake in Ascent Meditech (“Ascent”), the health company behind the market-leading Flamingo brand. The company’s products are currently sold to seven million customers, with a focus on providing high quality and competitively priced orthopaedics to India’s aging population.
Ascent, which has built a sophisticated manufacturing, distribution and retail strategy, specialises in wound care, mobility aids and orthopaedic soft goods. The company sold 15 million products in 2017 through its extensive network of 150,000 retail pharmacy points across 12 Indian States. Ascent’s flagship brand of products, Flamingo, is sold in more than 40 countries across the globe.
Over 80% of Ascent products are for treatment for orthopaedic disorders, which affect over 200 million people in India. The share of India’s population over the age of 60 is projected to increase from 8% today to 19% by 2050. Elderly populations tend to have a higher prevalence of orthopaedic ailments, preferring less invasive solutions to surgery.
Felix Olale, Partner and Global Co-Lead for Health Investments at LeapFrog, commented: “The Ascent Meditech team has achieved outstanding growth in the orthopaedic and wound care market, addressing a core need for consumers with high quality products and competitive prices, thus opening up accessibility. We see a huge opportunity for LeapFrog to partner with an outstanding management team to increase production and distribution of Ascent’s quality and trusted products, including the flagship Flamingo brand, in India, Asia, Africa, and the Middle East.”
The investment in Ascent will capitalise on the favourable dynamics in both the domestic and international markets. The $100 billion Indian healthcare market is expected to expand at 12-15% CAGR. Outside of India, the global market for orthopaedics and prosthetics spend is expected to reach $806.7m by 2020, more than double that of 2014, according to a report by Deloitte.
LeapFrog will leverage its deep expertise in healthcare and emerging consumer insights to support Ascent’s growth plans and will create additional value through continuing to strengthen the Flamingo brand. This will be achieved by utilising LeapFrog-generated consumer insights to develop additional consumer-focused products, while also expanding Ascent’s presence in sub-Saharan Africa and Southeast Asia by leveraging LeapFrog’s network in these geographies.
Rajiv Mistry, CEO at Ascent Meditech, commented: “We are delighted to partner with LeapFrog Investments, who share our vision of opening up access to quality and affordable healthcare products and continuing to grow this market leading and trusted brand. Ascent Meditech will benefit greatly from LeapFrog’s extensive network, as the company enters its next phase of growth.”
This investment builds on LeapFrog’s track record in the Indian market and on LeapFrog’s decade of experience in partnering with emerging market businesses to provide health insurance to emerging consumers. The company has successfully conducted six full and partial exits from key Indian brands including Mahindra Insurance Brokers, Magma Fincorp, and Northern Arc (formerly IFMR Capital) over the last 19 months. Health exits include global mobile health insurance provider BIMA to Allianz X, and West African life and health insurance provider Express Life, to Prudential PLC.
Berlin 11 July 2018:
Dr. Andy Kuper, founder and CEO of LeapFrog Investments, has received the 2018 Founder’s Award and Gold Medal from the International Insurance Society for his pioneering work. Launched in 2008, LeapFrog invests in companies that deliver health and wealth services for emerging consumers, with portfolio companies reaching 130 million people to date. In his acceptance speech at the International Insurance Forum in Berlin, Dr Kuper announced LeapFrog’s intention, through its portfolio of companies, to reach 1 billion emerging consumers with essential services by 2030. He called for the world’s largest insurance firms and investors together to close the global protection gap, covering 4 billion people, by 2030.
“Through Andy’s visionary leadership, LeapFrog has fashioned responsible investment through thought leadership, collaboration and demonstration. In just one decade, impact investing has exhibited dramatic result with exponential benefit to the underserved, emerging economies and the broad insurance industry,” said James Vickers, Chairman of the International Insurance Honours Committee, and Chairman, Willis Re International.
LeapFrog portfolio companies have grown revenue 40% a year since investment. The firm has also sold on companies to, and enabled new market entries for, the likes of Prudential Plc, Swiss Re, XL Catlin and Allianz. LeapFrog is backed by some of the world’s largest insurance and pensions investors, including Prudential Financial Inc., AIG, Swiss Re, AXA and Zurich.
“LeapFrog is a game changer,” said Mike Morrissey, International Insurance Society President and CEO. “It has expanded the investment market and enabled leading insurers to amplify their footprint in emerging markets to the benefit of the industry and those developing countries, all the while improving the lives of millions. Andy’s work has had a profound impact on the insurance industry and society in general. We’re proud to honour him and the work of LeapFrog Investments.”
The spending power of 4 billion emerging consumers is predicted to reach $20 trillion by 2025. Currently, only 70 per cent of these consumers have access to formal financial services, presenting a serious protection gap that imperils their security and productivity.
“We are at a historical moment in time where four billion people in Africa and Asia and beyond are rising out of low-income living and towards the middle class. This is being underpinned by the rapid technological change brought about by smart phone adoption, and coupled with evolving regulatory environments that is making these markets even more attractive for investment,” Dr. Kuper, founder and CEO of LeapFrog Investments, said. “LeapFrog companies today reach 130 million people, of whom 110 million are emerging consumers, and do so profitably and sustainably. Yet that is merely a beginning. Our goal for 2030 is to reach one billion people with the essential services – the safety nets and springboards to changing their own lives.”
With mobile penetration in emerging markets at over 80 per cent versus insurance penetration of less than 3 per cent, there is a massive market opportunity to provide insurance to underserved customers, especially through mobile channels. $15 trillion in consumption is forecast to come from emerging economies by 2020. They will account for the majority of the world’s GDP by 2030.
London 15 June 2018:
LeapFrog Investments the leading global impact investor in companies that deliver financial services and healthcare for emerging consumers, today announced its investment in ARM Pension Managers (PFA) Limited. The investment in ARM Pensions will tap a rapidly growing pensions market, with a particular focus on deepening reach into the vast group of emerging consumers in Nigeria. This is a continuation of LeapFrog’s success in bringing pensions and financial services to the millions of people in the region who are rising toward the middle class.
ARM Pensions is a high growth company that is one of the largest pensions fund administrator in Nigeria with about $1.8bn in funds under management. Clients are served through 57 locations across all 36 states of Nigeria. The company has mobile offices that reach consumers on the go as well as innovative digital channels ensuring swift access to accounts and assistance. ARM Pensions is well positioned to expand in Nigeria’s underpenetrated pensions market.
Karima Ola, Partner at LeapFrog Investments, commented: “ARM Pensions is a well-established first-class pension fund administrator with an impressive track-record of both profitability and growth. Our team brings significant operational skills to bear on the development of ARM Pensions’ market presence. We have identified valuable opportunities to support the company’s digital strategy, to facilitate partnerships and to increase the firm’s brand awareness in ways that further strengthen customer retention and acquisition.”
In partnership with LeapFrog, ARM Pensions’ management team will drive the firm’s growth in Nigeria’s most attractive financial services market. This investment is a continuation of LeapFrog’s success in the West African pensions market, following its successful exit from Petra Trust in February 2018. LeapFrog worked closely with the Petra Trust team to enhance the business to become the largest independent pensions provider in Ghana, seeing 76% average compound annual revenue growth over the period of LeapFrog’s investment. The financial terms of the new transaction are not disclosed.
Michael Joyce, Investment Director at LeapFrog Investments, commented: “Our impact investment in this outstanding high growth company will enable LeapFrog to contribute to the positive Nigerian growth story, for which pensions are fundamental. Pensions not only serve as a safety net for aging Nigerians, but can also make a huge impact on the households in which these individuals live, reaching both children and other family members – supporting education, healthcare and other essential services. LeapFrog sees the partnership with ARM Pensions, and our shared growth agenda, as capable of delivering large and measurable impact for Nigeria’s people.”
Wale Odutola, Managing Director at ARM Pensions, commented: “We are delighted to partner with the LeapFrog Investments team, who share our vision of opening up access to financial savings for all Nigerians. We look forward to increasing the level of participation in life-enhancing pensions, and solidifying our position as a leader in Nigeria’s pensions market, the most attractive financial services sector in the country.”
London 15 June 2018:
LLeapFrog Investments has won the ‘Portfolio Company of the Year’ Award at the Private Equity Africa GP & Advisor Awards 2018, for its investment in Goodlife Pharmacy, the leading East African pharmacy brand. Goodlife was recognised for building a large and trusted brand, associated with quality medicines and traceable supply chains, with profound impact. The popularity of the brand with customers has enabled rapid geographic expansion, with an increase from 19 to 38 stores in only one year, delivering strong unit economics and profitability.
Goodlife’s portfolio of products and services, unparalleled for the region, include nutritional services, telehealth, medicine dispensing, and beauty and wellness services. In this way, Goodlife plays an active role in the health management and provision of high-grade health services, at par with many leading Western pharmacies, and already reaches more than 1 million East Africans.
A shift in disease burden from acute to chronic illnesses such as Diabetes, Hypertension, and Cardio Vascular Disease is driving a need for the provision of long-term, non-hospital care on a distributed basis at the community level. Goodlife has built a business to enable ongoing management of these conditions, at the pharmacy level with plans to expand to 100 stores by 2020, and to serve 5.5 million people over the next five years.
Dr Felix Olale, Partner of LeapFrog Investments, commented: “The healthcare gap in Africa presents a long-term opportunity for LeapFrog to innovate and help to create a sustainable health infrastructure across the region. By putting consumer insights and needs at the heart of our strategy, we are building a business at a grassroots level that is both accessible and affordable to those who need it most. Goodlife is the greatest example of this approach in action.”
Goodlife recently added laboratory testing services to its offering, with an agreement with Lancet Labs. In-store testing is not only convenient; having internationally accredited lab services integrated into the pharmacies addresses the important challenge of unlicensed medical labs springing up across the region, resulting in incorrect diagnosis and treatment of patients.
The high-level commercial and operational standards established for Goodlife since LeapFrog’s investment have enabled the company to attract exceptional leaders to the business from both healthcare and retail sectors. In 2018, Amaan Khalfan joined Goodlife as CEO from the leadership team at the Aga Khan University Hospital, one of the leading healthcare networks in Sub-Saharan Africa.
Goodlife is well positioned for future growth, in a growing market: the IFC estimates that consumer spending on healthcare in Sub-Saharan Africa will double over the next ten years.
With over 10 years investing in healthcare and financial services, LeapFrog’s healthcare strategy is focused on bridging the gap between a growing consumer demand for healthcare services and the limited ability to pay for these services. By investing in both insurers and providers of healthcare services, LeapFrog aims to reduce the out of pocket expense burden for consumers, thereby increasing the overall impact on their welfare.