LeapFrog Investments fully exits East African pharmacy chain after eight years

LeapFrog Investments, an emerging markets-focused private equity and impact investment firm, has fully exited its eight-year-old investment in an East African retail pharmacy chain three years after partially monetizing it. The firm sold its remaining stake in the Kenyan pharmacy chain to an existing stakeholder, it said on Tuesday.

Temasek-backed LeapFrog, which is currently deploying from its $1.15 billion oversubscribed Fund IV, sold its stake in Goodlife Pharmacies, East Africa’s largest pharmacy chain, to CFAO Healthcare (formerly Eurapharma), the healthcare division of French conglomerate CFAO Group.

CFAO Healthcare is the wholesale distributor of pharmaceuticals in Africa, and owns and operates subsidiaries in 24 countries in the continent, as well as six French overseas territories. It also produces licensed drugs in Morocco and Algeria.

LeapFrog had first sold around 30% of its shareholding in Goodlife to CFAO Healthcare in March 2022. After this, CFAO Healthcare became the second-largest shareholder in Goodlife. 

In February, VCCircle had reported about LeapFrog’s plans to fully exit Goodlife, which is owned by Africa Chemist and Beauty Care (ACBC). Founded in 2014, Goodlife operates over 100 locations in Kenya and Uganda, serving two million people annually. 

LeapFrog, which has raised nearly $3 billion in commitments so far from over 100 institutional investors across six funds, originally acquired a majority stake in Goodlife in 2017 through its Emerging Consumer Fund III, and increased its stake in 2019. 

In a statement, LeapFrog said, “With its investment in Goodlife in 2017, LeapFrog helped accelerate a modern pharmacy retail category that previously did not exist at scale in East Africa… Goodlife has evolved into East Africa’s leading health services provider… enabling access to quality and affordable healthcare products and services to fast-growing communities across the region;” 

Talking about the stake sale to CFAO Healthcare, Biju Mohandas, partner and global head of healthcare at LeapFrog, said, “With its more than 70-year history and rich legacy of operating in Africa, CFAO Healthcare, the healthcare subsidiary of Toyota Group, is the ideal partner to carry this mission forward.”

As part of the deal, CFAO Healthcare has purchased a majority stake of 69.9% in Goodlife’s parent ACBC from LeapFrog Investments and management shareholders. Consequently, CFAO now holds sole control over ACBC and its subsidiaries, which include Goodlife Holdings, Goodlife Pharmacy, Africa 2 Chemist, and Beauty Care Uganda. 

Previously, Goodlife had raised $12 million in debt financing from French development finance institution Proparco in March 2022.

Founded in 2007 by Andrew Kuper, LeapFrog invests in growth-led impact opportunities in emerging markets, primarily in Asia and Africa, across three broad verticals–financial services, healthcare, and climate.

Its healthcare portfolio includes companies like Mumbai-based medical products firm Ascent Meditech, East Africa-focused specialty distributor for cardiac and orthopaedic equipment Pyramid Pharma, Bengaluru-based healthtech startup MedGenome, mobile health and fitness app Healthify, and omni-channel diagnostics platform Redcliffe Labs.

LeapFrog’s financial services portfolio comprises 21 investments, including Ghana’s Fidelity Bank, India’s largest autotech platform CarDekho, affordable mortgage platform Shubham, and Ghana’s life insurance player Milife.

LeapFrog marked the final close of its fourth fund in November 2024 with an oversubscription, securing commitments and co-investments worth $1.02 billion. Limited partners for the fund included Singapore’s Temasek, insurers AIA and Prudential Financial, and development finance institutions, including the European Investment Bank (EIB) and the US Development Finance Corporation.