Private Equity Eyes Inclusive Growth Amid Digital and Market Transformations

Entrepreneur

16 hours ago

For private equity (PE) and impact firms like Leapfrog, these trends are shaping their investment strategy for the foreseeable future.
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Emerging markets are undergoing a rapid transformation in access to essential services, driven by both rising demand and expanding digital infrastructure. According to the World Bank's Global Findex 2025 survey, financial inclusion has advanced at an unprecedented pace, with 40 per cent of adults in developing economies now saving through financial accounts, a 16-percentage-point increase since 2021.
Mobile-money adoption has been a key driver, with 10 per cent of adults using such accounts to save, underscoring the role of technology in bridging service gaps for low- and middle-income populations.
For private equity (PE) and impact firms like Leapfrog, these trends are shaping their investment strategy for the foreseeable future.
Pranav Kumar, Partner at Leapfrog Investments, said that the demand from low and middle-income customers for essential services like financial services and healthcare (such as mortgage, small business loans, or diagnostics) is large and still underserved. On the supply side, the key trends like digitization (and now AI), smartphones, and public digital infrastructure have allowed smart-driven entrepreneurs to build solutions to serve this demand at low cost.
"Patient and operationally active equity capital such as ours will continue to play an important role in enabling these entrepreneurs and management teams. The increasing depth and sophistication of capital and IPO markets, enabling exits, will continue to encourage equity capital in the private space," said Kumar.
Bain & Company reports that in 2024, India was the largest exit market in the Asia-Pacific region, with IPO exit values up 78 per cent year-on-year. S&P Global data further indicates a 156 per cent jump in private equity exits in India over the same period, even as new deal volumes eased.
Such trends suggest that patient, growth-oriented capital can now be recycled more efficiently, encouraging deeper investment in high-impact sectors.
Leapfrog has announced two successful exits in recent months, the first being Fincare Bank exited through block deals. The firm also sold its majority stake in Goodlife Pharmacy, East Africa's largest pharmacy platform, to CFAO.
"Our strategy has been to partner with quality management teams, fund and execute growth through economic cycles, and aggressively leverage technology to drive economics," said Kumar.
Kumar added that the firm remains upbeat about the sustained long-term growth of Indian businesses supported by a resilient Indian economy and a deep capital market.
"However, it is important to identify resilient business models and high-quality partners. We will continue to back businesses that deliver commercial returns alongside achieving tangible social impact to the underserved population and small businesses."