• Partial exit values LeapFrog’s investment at 3x invested capital
• Northern Arc AUM grown by 22x to $1.4 billion since investment

Mumbai, India: LeapFrog Investments, the pioneering profit with purpose private equity firm, announces a successful partial exit of its portfolio company Northern Arc Capital Limited this week through an initial public offering that values LeapFrog’s investment at over 3x invested capital.

LeapFrog was the first institutional investor to back Northern Arc in 2014, seeking to support the rapid expansion of the non-bank lender’s debt financing platform across India’s low-income households and businesses. Since then, Northern Arc’s share price has increased 6x in local currency and assets under management have grown by 22 times to $1.4 billion, with its proprietary lending technology enabling the flow of over $20 billion in credit and reaching 101 million people.

The vast majority of those served by Northern Arc are low-income women, many of whom manage their own micro, small and medium enterprises across rural and regional India. This traditionally underserved segment is both a significant driver of growth and prosperity across India, and a driver of improved educational and employment outcomes for women and girls.

Michael Fernandes, Investment Partner at LeapFrog Investments, said: “We are incredibly proud to see how Northern Arc Capital has become a leading Indian NBFC, evolving from the upstart with bold ambitions that we first invested in nearly a decade ago. Our investment has yielded tremendous results  – both financial and in terms of its social impact built on a shared vision of growth and innovation.”

Pranav Kumar, Partner at LeapFrog Investments, said: “Northern Arc is a pioneer business which – through its own incredible growth, innovation and world class risk management – catalysed the entire inclusive finance industry in India. This successful IPO is a strong validation of LeapFrog’s approach of profit with purpose and positions Northern Arc Capital for continued success as an enduring business.”

Ashish Mehrotra, CEO at Northern Arc, said: “Founded 15 years ago with a clear mission to ensure seamless access to credit for underserved households and businesses, Northern Arc has grown into a diversified, multi-channel financial services platform having facilitated finance of over $20 billion, impacting more than 101 million lives. We are overwhelmed by the response from public markets to Northern Arc’s IPO. We are truly honoured by the trust placed in us by the market, shareholders, customers, originator partners and investor partners. We are grateful to have received continuous support and guidance from LeapFrog for more than a decade.”

Northern Arc’s IPO and listing on the Indian BSE and NSE stock exchanges raised approximately $60 million of primary capital to fuel future growth and provided a partial exit to its existing shareholders through a $33 million secondary component. The IPO was heavily oversubscribed (117x). This exit event, combined with earlier partial exits, sees LeapFrog realise $50 million before expenses from its original $48m investment in the company while still holding a significant 16% stake in the listed company.

LeapFrog invests in healthcare, financial services and climate solutions businesses in high-growth global markets. Its companies deliver distinctive impact and robust returns, growing revenues on average 23% a year. LeapFrog companies now reach 537 million people in 37 countries. The firm has raised billions of dollars from global institutional investors, including a US$500m commitment by Temasek to LeapFrog and its growth equity funds. LeapFrog has twice been ranked by Fortune as one of the top Companies to Change the World and was named inaugural Pioneer in Impact by the FT and IFC at the Transformational Business Awards. For more information, go to: www.leapfroginvest.com.

LeapFrog Media Contact

Montfort Communications – LeapFrog@Montfort.London