The African healthcare firm has grown into a chain serving two million customers a year. LeapFrog has sold its remaining stake to CFAO Healthcare.
London-based LeapFrog Investments has sold its remaining stake in healthcare chain Goodlife Pharmacy to CFAO Healthcare, a distributor of pharmaceutical and medical products in Africa and the healthcare unit of the Toyota group. The full exit comes after LeapFrog sold a minority stake to CFAO Healthcare in 2022.
LeapFrog, a private equity and impact investment firm focused on emerging markets, made its first investment Goodlife in 2017, three years after the Nairobi-based company was founded. The investment has helped turn the firm into East Africa’s largest retail pharmacy platform, offering essential pharmaceuticals, as well as beauty and wellness products, diagnostics and primary care consultation services.
Since LeapFrog’s investment, the chain has grown from 19 stores to around 150 locations across fast-growing communities in Kenya and Uganda. No modern pharmacy retail chains previously existed at scale in East Africa before the investment in Goodlife, according to LeapFrog.
Goodlife’s expansion shows private investments in African healthcare can deliver both financial returns and impact, according to LeapFrog partner and global head of healthcare, Biju Mohandas, who declined to comment on the return the firm made from its investment.
“This is a powerful demonstration of what’s possible in African healthcare with the right capital and the right partner. Together with a world-class management team, we built Goodlife into a household name – trusted by millions for vital medicines and health services,” Mohandas said.
Operational support
As previously reported by Impact Investor, LeapFrog last year announced it had closed a fourth fund focused on high-impact healthcare and financial services companies in global growth markets after raising more than $1bn (€754m) from institutional and private investors, global asset managers, healthcare investors and foundations and endowments.
During its eight-year investment, LeapFrog helped Goodlife with hands-on operational support such as supply chain optimisation, store rollout and capital deployment, Mohandas told Impact Investor. It also assisted with the recruitment of an executive team, the launch of a digital and deliveries business and a customer loyalty programme that now has more than half a million members.
“These initiatives enabled Goodlife to scale sustainably, build strong customer engagement, demonstrating resilience and clear market differentiation even through the COVID-19 pandemic and broader macroeconomic headwinds,” Mohandas said.
LeapFrog typically stays invested in a portfolio company for five to seven years on average, according to Mohandas. “We are not averse to staying invested for longer in quality assets, and our goal is always to ensure that an exit event maximises both financial returns and impact,” Mohandas said.
The African healthcare market may be worth as much as $259bn by 2030, which would make it the second-largest in the world after the US, according to a 2019 United Nations report.
“Goodlife Pharmacy has always been dedicated to enhancing health and wellness, and with the backing of LeapFrog Investments, we’ve achieved tremendous progress toward our mission. Partnering with CFAO Healthcare offers a unique opportunity to expand that mission, delivering greater impact and value for our customers and communities,” said Justin Melvin, CEO of Goodlife Pharmacy.
