LeapFrog Investments, a private equity fund focused on the micro-insurance sector, has invested $15 million or Rs 67 crore in Shriram CCL. According to reports, LeapFrog has picked up a little less than 10 per cent stake, valuing the company over $150 million. The deal will help Shriram CCL expand its services in areas like insurance, savings and investment products for the underserved Indian market.
Shriram will use this funding to expand the operations of its subsidiaries – Shriram Fortune Solutions Ltd (involved in financial product distribution) and Shriram Insight Share Brokers Ltd (engaged in share broking business).
Shriram Fortune distributes mutual funds, debentures, fixed deposits and life & non-life insurance products, and has a network of 400 branches. However, this network may soon expand to 100 branches. Shriram Insight will also expand its network from 1,200 to 2,000 branches.
“With LeapFrog’s injection of significant new capital and expertise, Shriram CCL is expected to reach, protect and enable 10 million people in India,” a statement said.
“This is much more than just another investment in the group. It is a strategic partnership that will augment Shriram’s ability to further its financial inclusion goals. LeapFrog’s expertise in providing innovative insurance products to the underserved segments, together with Shriram’s consistent track record in making a positive difference in the lives of its customers, present a potent combination,” said G.S. Sundararajan, managing director of Shriram Capital.
“Our partnership with the Shriram Group will have enormous social impact by financing and improving the cover for millions of financially excluded clients and their families in India while generating healthy financial returns. By focusing on high-growth emerging markets such as India, and targeting stellar companies who are serving the next billion consumers emerging into the formal economy, LeapFrog’s approach delivers on the double bottom line,” said Dr Jim Roth, co-founder of LeapFrog Investments.
Launched in 2008, LeapFrog manages a $135 million fund focused on inclusive insurance and related financial services in Asia and Africa. It now plans to invest $30-$37 million in India from this fund, according to an earlier interview with VCCircle. Investors in the fund include JP Morgan, IFC, Soros EDF and Omidyar Network, among others.
Unitus Capital was the sole investment advisor assisting LeapFrog in this transaction while Amarchand Mangaldas provided legal representation.