New Delhi, July 16: LeapFrog Investments, the profit-with-purpose investment firm, is investing INR 279 crore ($30 million) in Mumbai-based Auxilo Finserve, the leading education-focused NBFC, that provides loans to Indian students to pursue higher education in India and abroad.
LeapFrog, the global firm, made the investment from its ₹ 6500-crore fund, which focuses on financial inclusion, climate change and healthcare opportunities in India, marking its first investment in the country’s education finance sector.
Auxilo provides loans to Indian students to pursue higher education abroad, enabling low and middle-income consumers to access higher income generation opportunities and greater household prosperity.
Rising tuition fees and the increasing cost of accommodation and academic necessities, mean the aspiration of pursuing higher education is often unattainable for many Indian students, especially those from low- and middle-income households. Auxilo’s innovative model of underwriting uses student academics, test scores, country of study and degree choice to predict future employability, allowing it to offer merit-based finance to an increasingly broad range of students seeking to acquire master’s degrees and other post-graduate qualifications at the world’s top universities.
Indian students have a long tradition of acquiring post-graduate knowledge and skills at a range of top tier international universities, leading to the development of world-class Indian STEM companies in IT, biotech, AI and manufacturing. India’s high achieving diaspora contribute to the $111 billion in annual remittances (the largest globally), which is re-injected into the domestic economy each year. Many return to India to found and operate the country’s largest companies, or work in key enablers like venture capital, private equity, banking and advisory firms, which together support the third largest startup ecosystem in the world, collectively valued at $350 billion in 2023.
Stewart Langdon, Partner and Head of Digital at LeapFrog Investments, said: ‘LeapFrog is dedicated to supporting springboards into prosperity across a range of sectors in India – from finance and insurance, to healthcare and clean technologies. With Auxilo, we see a unique opportunity to enable the best and brightest to pursue their dreams of higher education and training, no matter their financial background.’
“We are drawn to businesses that exhibit rapid growth and significant impact. Auxilo is facilitating the overseas journeys of approximately 10,000 students this year, helping them achieve their dreams. This combination of high growth and high impact is precisely why we are excited about Auxilo,” Langdon said, explaining the rationale behind LeapFrog’s investment in Auxilo.
“We have a new ₹6500 crore fund focused on financial inclusion and healthcare, and you can expect to see increased activity from us in the healthcare sector,” he said.
“With an impressive reach to date, LeapFrog believes that Auxilo has the potential to scale further across India, building the highly skilled future workforce that will continue the country’s remarkable progress. As part of the transaction, LeapFrog will appoint a representative to the Auxilio board to help to drive strategic initiatives and guide the company on its next stage of growth,” Langdon said.
“Leveraging LeapFrog’s best-in-class approach to impact management, the team will work to lift Auxilo’s ESG standards and reporting, to bring it in line with global best practices. This will include work to understand how applicants and their families can benefit from loans over time,” he said.
“LeapFrog will work with the company to enhance other gender factors within the business, including increasing disbursements to women pursuing STEM courses, currently a third of all borrowers,” he said.
“LeapFrog’s commitment to social impact aligns perfectly with our vision of empowering individuals through education. This investment, along with continued support from our existing investors, will enhance our ability to support students in achieving their academic dreams,” said Neeraj Saxena, MD & CEO at Auxilo.
The new round of capital infusion will be utilized to expand customer reach, enhance student funding, incorporate technological infrastructure across business processes, and boost the company’s Institutional lending segment.
Since being operational in 2018, Auxilo has provided education loans to over 12,000 aspirational students, across more than 1,100 universities and education institutes in over 30 countries. “The company has also provided finance to over 170 educational institutes for their infrastructure expansion and working capital requirements,” Saxena said.
Auxilo’s Loans and advances have grown at 75% CAGR (Compound Annual Growth Rate) and currently stands at more than ₹3,000 Cr, he said.
In the next five years, Auxilo is looking forward to disbursing ₹ 25,000 Cr to more than 1.5 Lac aspirational students for higher education, skilling and upskilling, executive courses etc in both – domestic and abroad as well as ~4500 educational institutions, Saxena said.
“This significant market potential highlights the sustained interest of Indian students in pursuing education abroad and the broad array of opportunities available to them across different countries,” he said.
Auxilo’s rapid growth has been accompanied by rigorous risk management, maintaining excellent asset quality, while creating value for all stakeholders, Saxena said. Auxilo’s 350 employees operate out of seven branch offices, offering loans to customers across India.
About LeapFrog Investments
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 recent $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.
