LeapFrog announces USD 180 million investment in market leader Enterprise Group Ltd

  • Investment represents LeapFrog Investment’s largest deal to-date – demonstrating the vast commercial and social opportunity to deliver services to the emerging consumer
  • Enterprise Group commitment marks the first investment of LeapFrog Strategic African Investments (LSAI), a USD 350m fund in which Prudential Financial, Inc. (PFI) (NYSE: PRU) is the primary investor
  • LSAI was established in 2016 to access rapidly growing financial services opportunities in Africa
  • Capital injection will address growth opportunities in Ghana and the wider region, expanding Enterprise Group Ltd’s market leadership, as well as buying out Sanlam Emerging Markets Proprietary Ltd. Investment
  • Upsurge in demand for financial services in Ghana has enabled Enterprise Group’s life insurance arm, Enterprise Life, to report a market-leading compound annual growth rate (CAGR) of 26 per cent in premiums between 2013 and 2015
  • Only 5 per cent of Ghanaian adults have some form of insurance, but market growth is 30 per cent per annum according to The World Bank

Accra, Ghana, 23 June 2017:

LeapFrog Investments, the profit-with-purpose investor in emerging markets, today announces a total investment of USD 180m in Ghanaian financial services market leader, Enterprise Group Limited (Enterprise Group). The transaction draws from a USD 350m separately managed account, LeapFrog Strategic African Investments (LSAI), which was established in 2016 to access high growth markets in Africa.

The Enterprise Group commitment represents LeapFrog’s largest investment to-date and marks the first investment of LSAI, a fund in which Prudential Financial, Inc. (PFI) (NYSE: PRU) is the primary investor. LSAI will manage the EGL investment, applying decades of operational expertise in emerging markets financial services to the Enterprise Group business, increasing efficiencies, offering product development opportunities and helping expand the business in Ghana and other growth markets in the region. The transaction is subject to customary closing conditions, including regulatory approvals.

Enterprise Group financial services include insurance, life cover, and pensions for emerging consumers. Enterprise Group’s life insurance arm, Enterprise Life, is Ghana’s leading provider of life insurance, controlling gross premiums of over USD 50m. The Company has reported a market-leading compound annual growth rate (CAGR) of 26 per cent in premiums between 2013 and 2015.

“Enterprise Group is a pioneer in delivering vital financial services to emerging consumers in Ghana. Its leading position in financial services, as well as dominance in insurance with over 28 per cent of the market, is a testament to the quality of the financial services it provides,” said Doug Lacey who co-led the transaction with Norm Kelly on behalf of LSAI.

“We are extremely pleased to enter into this strategic relationship with Enterprise Group,” said Norm Kelly of LeapFrog Investments. “Enterprise Group’s management team has built a robust platform for growth in West Africa. With the capital and expertise of our team behind the business, we are confident that it will scale to provide millions more people with access to essential financial services.”

With the new investment, Sanlam Emerging Markets Proprietary Ltd will exit its holding in three of Enterprise Group’s subsidiaries companies; namely Enterprise Life, Enterprise Insurance and Enterprise Trustees for USD 130 million. A further USD 50 million will be invested to fund Enterprise Group’s future growth.

Keli Gadzekpo, Group CEO of Enterprise said “We at Enterprise are delighted to welcome LeapFrog Investments into the Enterprise Family. They bring an incredible network of global insurance contacts and experience, and also the capacity to provide growth capital towards the realisation of our very ambitious strategic objectives. We are pleased they have chosen to partner with us.”

The rapid expansion of the Ghanaian economy, projected at 8.7 per cent in 2017, is creating substantial demand for financial services among emerging consumers in the country. The investment positions Enterprise Group to further seize that vast market opportunity.

LeapFrog and Omidyar Network target unbanked billions in Cignifi deal

  • LeapFrog Investments and Omidyar Network, the investing firm of eBay Founder Pierre Omidyar, have invested in Cignifi, a big data platform powering large-scale financial inclusion
  • Cignifi’s mobile-generated algorithms have created financial profiles for over 100 million people in 13 emerging markets, putting credit and insurance within reach for people lacking credit scores
  • The company demonstrates the growth potential of mobile technology companies delivering financial services to low-income consumers in emerging markets
  • According to the World Bank, fewer than 1 in 10 people in low- and middle- income countries have a formal credit history; over 2 billion have mobiles but limited access to financial services
  • Cignifi has grown rapidly through strategic partnerships with leading global brands including Telefónica, AT&T, Globe Telecom, Equifax
  • Cignifi’s Board includes former CEO of FICO, the leading provider of consumer risk scores in the US

London, United Kingdom, 22 June 2017

Vital access to financial services for two billion underserved people in emerging markets comes a step closer today as LeapFrog Investments announces its acquisition of a stake in Cignifi, a platform creating financial profiles through mobile phone data.

LeapFrog, the pioneer in profit with purpose investing, is partnering with Omidyar Network, the philanthropic investment firm created by eBay Founder Pierre Omidyar, which is increasing its long-held investment in Cignifi. The investment will drive further scale in the reach of the Cignifi business.

Cignifi is poised to help meet the needs of more than two billion emerging consumers worldwide who have mobile phones but limited access to financial services. The company has developed the first big data platform to deliver credit and marketing scores that currently profile more than 100 million consumers in 13 emerging markets, using mobile phone behaviour.

With over 90 per cent of the population of low- and middle-income countries lacking a documented credit history, billions are left in the “Catch-22” of being denied access to formal financial services because they’ve never taken out a loan. Without a credit history, they fall outside of the traditional financial industry’s architecture of credit scoring to assess risk.

Cignifi has developed a proxy for conventional finance-based credit scoring using nonfinancial data, such as mobile calling and texting patterns, the routine of being at a workplace or home, and regular contact with reputable borrowers.

“This investment underscores the ability of mobile enabled financial services to scale up rapidly, reaching billions of consumers, and driving vast social impact throughout emerging markets,” said Jonathan Hakim, Founder and CEO of Cignifi. “LeapFrog will accelerate our ambition to reach one billion people in emerging markets by supporting Cignifi’s growth strategy and expansion into adjacent categories such as insurance.”

LeapFrog brings significant experience in rapidly scaling mobile technology companies that deliver financial services to low-income and underserved consumers. Existing portfolio companies such as BIMA, the global leader in providing insurance through mobile technology, and Jumo, Africa’s first mobile money marketplace, have quickly grown to reach tens of millions of consumers.

“Cignifi is doing something incredibly important,” said Stewart Langdon, Partner at LeapFrog Investments. “Up until now, the world’s low-income consumers have had a very hard time borrowing money because they don’t have credit histories. Cignifi addresses this through a machine learning platform that integrates with the world’s most accessible infrastructure – mobile networks – to give people a digital identity. This financial technology has the potential to revolutionise how we assess the creditworthiness of billions of people globally and drive down customer acquisition costs.”

Using mobile data as a substitute for traditional credit scoring opens up an enormous social and commercial opportunity. McKinsey and the IFC estimate that the unmet need for credit among emerging markets businesses alone is worth $2.1 trillion to $2.5 trillion.

Cignifi has achieved fast growth by partnering with some of the world’s largest brands, such as mobile network operators (MNOs) AT&T, Telefónica and Globe Telecom, global banks like Santander, and Equifax, one of the top three global credit bureaus, to offer essential financial services across Africa, Asia and Latin America.

“Omidyar Network has backed Cignifi since 2012 because we are firm believers in the power of big data analytics to lower the barrier of entry for low- and middle-income consumers to the formal credit market,” said Arjuna Costa, Partner at Omidyar Network. “The ubiquity of mobile in emerging markets has opened the door for disruptors such as Cignifi to become the new golden standard of credit assessment and ultimately alter the way we reach and extend credit to consumers who have been traditionally invisible to lenders.”

Headquartered in Cambridge, Massachusetts, Cignifi is led by a management team with extensive experience in mobile technologies, data analysis and emerging markets. Hakim is an industry-leading authority on mobile credit, previously serving as a director at the IFC, a former investment banker at firms including UBS, and The Economist’s banking correspondent.

Cignifi began life at Oxford University, where Peter Grindrod, CBE, a leading mathematician at the University of Oxford’s Mathematical Institute, continues as an adviser to the Cignifi Board. Larry Roseberger, former CEO of FICO, the leading provider of consumer risk scores in the US, is a Director.