LeapFrog invests $22 million in Goodlife Pharmacy
- LeapFrog Investments has announced its first healthcare investment, with a $22m (KES 2.2bn) majority stake in Kenya’s Goodlife Pharmacy
- This is the largest direct investment to date in the East African retail pharmacy sector, which is expected to grow by 12 per cent per annum to $1.3bn in 2020
- Goodlife brings access to trusted products and services to 600,000 customers in 19 convenient locations around Kenya, and Uganda. This is LeapFrog’s third investment in Kenya, with over $40m (KES 4.0bn) currently invested
- To learn more about the story and people behind this announcement, watch the full video here
Nairobi, Kenya, 23rd November
LeapFrog Investments, a leading specialist investor in emerging markets, today announced the acquisition of a $22m majority stake in Kenya’s GoodLife Pharmacy. This marks LeapFrog’s entry into healthcare, and is the largest direct investment to date in the East African retail pharmacy market.
Goodlife provides trusted pharmaceuticals to 600,000 customers from convenient locations across East Africa. Co-founded by Dr Josh Ruxin in Nairobi in 2013, the company has quickly grown to reach 19 stores under CEO Tony McNally, and plans to expand its footprint to over 100 stores within the next five years to provide increased quality and access to consumers across income groups.
The transaction was led by Kenyan Dr Felix Olale, LeapFrog Partner, Global Co-Leader for Health Investments, and a leading expert in healthcare in emerging markets. He commented, “LeapFrog invests in growing companies that deliver empowering services to emerging consumers. Goodlife has a great management team that has built a truly customer-centric and innovative business model: it is a pharmacy, a wellness outlet, a diagnostics centre, and is introducing in-store access to clinicians through telemedicine. This is a model that markets like Kenya are demanding, particularly as we see an increase in chronic lifestyle diseases.”
On LeapFrog’s entry into healthcare, Dr Olale said, “LeapFrog is deeply specialised in financial services. With the Goodlife investment we have moved into a closely-linked sector: healthcare. We are now investing in both payer and provider, helping consumers both to access and afford quality health care.”
LeapFrog is also a majority shareholder in leading Kenyan health insurer Resolution Insurance, investing $18.7m in 2014.
Dr Josh Ruxin, co-founder of GoodLife Pharmacy, said, “LeapFrog is not just a provider of capital. We also appreciate their healthcare expertise, and look forward to partnering closely with them to accelerate growth. This investment will benefit the people that really matter – our customers. The partnership will help us deliver high quality products to millions of people at affordable prices. Through Goodlife, we intend to transform delivery of pharmaceutical and wellness products.”
The estimated value of Kenya’s retail pharmacy market is $725m. Growing at a 12 per cent CAGR, it is expected to reach $1.3bn by 2020. Nevertheless, the availability of affordable and non-counterfeit drugs for consumers remains a challenge. The World Health Organization estimates that 30 per cent of all Sub-Saharan Africa pharmaceuticals are counterfeit.
Goodlife is among the companies and stakeholders that are working at the heart of these issues. The Pharmaceuticals Society of Kenya’s Green Cross Audit recently endorsed Goodlife for best pharmacy practice in the country, a result of their demonstration of excellence in pharmacy practice and governance standards.
Ascension Investment Management, The Louis Family and PG Impact Investments, have co-invested in Goodlife. IFC, a current investor will retain its investment in Goodlife. As part of this transaction, existing investor Catalyst will be exiting its Goodlife shareholding.