|
About Nakul Zaveri |
|
Partner & Co-Head, Climate Investment Strategy, LeapFrog Investments
Nakul Zaveri is a partner at LeapFrog Investments and co-head of the firm’s climate investment strategy.
Nakul has over 20 years of experience spanning entrepreneurial, operational and investing activities. He brings relevant investing experience across Climate and Responsible Investment strategies including investing in renewables, climate tech, industrial/ enterprise efficiency, evolving consumer priorities, and related value chains.
Nakul joined LeapFrog in 2022 and in his current role guides LeapFrog’s climate strategy, focussed on supporting pathways out of poverty for emerging consumers that also deliver rapid decarbonisation of all sectors of industry.
Previously, Nakul was Managing Partner at Relativity Investment Management, a sustainability focussed investment manager, where he made investments in high-growth companies addressing risks and opportunities created by megatrends of climate change, demographic shift, and increasing use of technology. Prior to that, he was a senior investment professional with Global Environment Fund – a US-based mid-market private equity fund, and earlier, Climate Change Capital.
Nakul has an MBA from the University of Oxford’s Said Business School and is a member of the Exeter College in Oxford. He completed his Bachelor of Commerce & Economics from University of Mumbai’s Sydenham College.
|
|
1 As a leading impact investor, Leapfrog focuses on digitally-enabled solutions which provide essential services to emerging consumers. Could you help us understand your current portfolio in India? What are the major sectors or segments across which your Indian portfolio is distributed?
|
LeapFrog Investments in healthcare, financial services and climate solutions businesses in high-growth global markets. Its companies deliver distinctive impact and robust returns, growing on average 24 per cent a year. LeapFrog companies now reach 451 million people in 35 countries.
Historically, LeapFrog has invested in healthcare and financial service companies in global growth markets. In India, this currently includes the world’s largest emerging market genomics business (MedGenome) and one of India’s fastest growing affordable housing lenders (Shubham) as well as digital health app HealthifyMe, MSME lender Northern Arc and at-home diagnostics provider Redcliffe Labs. As our firm has grown and the climate crisis has become more urgent, we’ve broadened our strategy to also include climate solutions businesses, and are looking to partner with companies which dually improve services for emerging consumers as well as reduce their carbon footprint as they rise into the middle class.
|
2 What are your views on the impact investing market in India? How does it compare with other emerging markets where you invest in? Could you share Leapfrog’s investment strategy in India for the calendar year 2023?
|
The market for impact investing in India has grown substantially over the past ten years and we continue to be impressed with the scale and scope of purpose-driven businesses being created and launched across the country. While impact investments in markets such as Africa initially were focused on financial inclusion, we have seen that the industry in India has always been quite broad from the outset, including investments across health, financial services, education, climate and beyond.
LeapFrog invests in transformational businesses delivering essential services to emerging consumers, and we will continue to seek out opportunities to deliver impact at scale in 2023.
We continue to remain excited about India’s growth prospects and its large emerging consumer base. Robust policy framework, digital acceleration and adoption across critical areas and evolution of new business models make India a relevant geography to allow investors to participate in the growth journey while delivering value and impact at scale.
|
3 Can you give us some examples of successful investments made by LeapFrog in India, and what made these companies stand out?
|
MedGenome – LeapFrog invested in MedGenome in 2020, impressed by the knowledge and passion of the management team and understanding the growth ahead in precision medicine, especially for underserved populations across South Asia. In the time since we invested, the company has gone from strength to strength – together, we worked to bring in new investment from Novo Holdings, a leader in global diagnostics, and have improved the company's reach significantly to deliver affordable genetic testing to more than 200,000 patients.
Shubham Housing Development Finance – LeapFrog invested in Shubham in 2022, recognising the importance of quality home ownership in creating better lives for India’s emerging consumers. The company uses technology to provide housing finance solutions to families with informal incomes, many of whom have lacked access to formal finance previously. Shubham’s innovative business model and its unique screening methods were identified as being high impact and highly scalable, creating significant opportunities for a LeapFrog partnership.
Sun King – LeapFrog led an expanded Series D funding round for Sun King in December 2022, excited by the prospect of growing the company’s reach further into Asia and across Africa. The company is the world’s largest pay-as-you-go financier for solar products and is enabling greater access to more sustainable and lower-cost energy for off-grid customers. While the company was started in Kenya, it has grown significantly across other parts of Africa and into Asia, leveraging its learnings from those markets to improve customer access no matter where they live.
|
4 How does LeapFrog support and add value to the growth PE it invests in, beyond just providing funding?
|
LeapFrog partners with its portfolio companies to deliver impact and profit uplift via a range of value add initiatives ranging from customer experience, talent management and ESG. With 15 years of investing experience in global growth markets, LeapFrog has developed an extensive understanding of emerging consumer preferences and uses these insights to improve the customer experience for its portfolio companies. This has included projects such as building customer loyalty platforms or improving the customer journey online, resulting in tangible upside for businesses (More examples here). In addition, talent management is another key area of focus, where LeapFrog helps broaden the leadership skills of management, plan for future growth and identify the right talent. As a leading impact investor, strengthening a company’s ESG and impact credentials is also a key value add, which is increasingly important for attracting quality capital. LeapFrog leverages the learnings from its own proprietary FIIRM (Financial, Impact, Innovation and Risk Management) framework to encourage best practice in impact measurement and management across our portfolio.
|
5 LeapFrog Invest is known for its pioneering work in impact measurement and management. Can you tell us more about your approach to measuring and tracking impact, and how this sets you apart from other investors in the industry?
|
Measurement, insight, and accountability are key pillars of the LeapFrog ethos and identity. The firm seeks to measure purpose as rigorously as profit and reports on both financial and social performance quarterly. Along with the aforementioned FIIRM framework, there are typically two main impact dimensions to an investment that LeapFrog assesses: the number of emerging consumers served, and the quality, relevance, and affordability of the products or services provided.
As pioneer in the sector, LeapFrog is committed to ensuring the robustness of the impact industry - LeapFrog co-designed and were founding signatories of the Operating Principles for Impact Management (OPIM) issued by the International Financial Corporation (IFC) and World Bank Group. The nine principles of OPIM were created to set a basic market standard for impact investing, addressing institutional investors including pension and sovereign funds, insurers and banks, endowments, and family offices. LeapFrog was the first impact investment firm globally to announce an independent audit against the principles, achieving the top rating of ‘advanced’ on all principles in its recent 2023 audit (more detail here). Independent auditor BlueMark ranked LeapFrog among the top 10 impact firms it has audited globally in 2023. This demonstrates not only LeapFrog’s influence in setting industry standards for impact measurement and management but also the integrity of its own internal processes.
|
|