September 13

Scott Anderson

Weekly Roundup 9-13-14: Movirtu’s Blackberry buyout and a $400M leap from LeapFrog

“Cloud phone” company Movirtu was best known, at least among the social enterprise crowd, for its BoP-focused applications. But it appears that flagging smartphone provider Blackberry found its top of the pyramid technology more enticing.

Blackberry on Thursday announced it had purchased Movirtu for an undisclosed amount.

Movirtu’s technology was similar to a cloud-based Web mail service, allowing customers to log into either their phone – or if they don’t own one, to someone else’s – in order to make a call. The service also enables texting and bank transactions, such as money deposits or transfers. Accessing the cloud through feature phones, Movirtu’s solution was designed to be far less cost prohibitive for users earning $2 a day or less, and the company previously announced a goal of reaching 4 million users by 2013.

Blackberry’s interest in Movirtu appears to have been motivated by a desire to reach more affluent users. The UK-based Movirtu developed a technology known as ManyMe, which enabled users to add multiple phone numbers (such as work and personal numbers) on a single handset. This “virtual SIM” allows users to toggle between numbers and profiles without needing to swap out SIM cards. The purchase represents a coveted financial exit for Gray Ghost Social Ventures and Grassroots Business Fund, which previously invested $5.5 million in Movirtu during a series A round.

It’s unclear what, if anything, is happening with Movirtu’s mobile transaction systems catering to the poor, but if we find out more we’ll post about it.

LeapFrog jumps to a record $400 million fund-raise

Less than a year after private equity firm LeapFrog recorded one of the biggest impact investment exits ever, the company has closed a second fund worth $400 million, which Reuters said constitutes “the largest ever for a fund specializing in low-income emerging market financial services.”

The fund, triple the value of LeapFrog’s first fund that closed in 2009, will invest in companies in Africa and Asia.

Investors in Fund II include a number of the world’s largest insurers, including SwissRe, PartnerRe, AIG, MetLife, Prudential Financial and AXA, along with Dutch development bank FMO, the European Investment Bank and DEG. J.P. Morgan and TIAA-CREF have also invested, according to Private Equity International.

LeapFrog’s Fund II plans to make equity investments of between $10 million and $50 million in South Africa, Kenya, Ghana, Nigeria, India, Sri Lanka, Indonesia and the Philippines, the publication reported. In December, the impact investor announced it had sold its equity stake in Ghanaian insurer Express Life to Prudential PLC. Express Life sells micro-insurance and savings products to 730,000 mostly first-time buyers. LeapFrog notes that when it first invested in Express Life, the insurer was covering about 60,000 people.

Andrew Kuper, LeapFrog’s Sydney-based chief executive, told Reuters that the firm’s portfolio “showed an average 40.6 percent increase in operating revenue and a 39 percent rise in profitability last year.”

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