Tiger Global’s balancing strategy: Pours $135 Mn into 7 B2C startups

Tiger Global has made a return after three years hiatus from the Indian startup ecosystem. At the fag end of the last year, the hedge fund placed first bet on Facilio, an Internet of Things (IoT) and Artificial Intelligence (AI) driven facilities optimisation software.

Ever since then, it has invested in about 18 companies including Clevertap, Ninjacart, Moglix, Fyle, Open Financial, OkCredit, Locus and others. The second coming of Tiger Global was heralded with a shift in focus from the first one - B2B.

For many, it seemed that the investment firm would only place bets on B2B companies. However, Tiger Global has been striking a balance by handpicking deals in consumer internet space as well. It made a comeback in the B2C segment by contributing $15 million in a larger round in Grofers, which was led by SoftBank.

Backing Grofers wasn’t convincing enough to assert that Tiger would aggressively scout deals as it has been executing in the B2B segment. But such doubts go away with the fact that the hedge fund has made four deals in a row in less than four weeks.

Tiger Global invested $75 million in home service marketplace UrbanClap in the first week of this month, followed by a $15 million round in INDWealth. Moreover, in the last two weeks, it had also participated in a $20 million round in InterviewBit Academy and $14 million in Cred.

In May, Tiger Global had also invested close to $5 million in video content platform, The Viral Fever (TVF).

According to Entrackr ‘s estimate, the investment firm has invested over $110 million in the five consumer Internet firms mentioned above. It also invested about $25 million in Ola Electric. Ola Electric is technically a B2B firm, but the company claims to have elements of both (B2B and B2C).

If we count it in B2C, then Tiger investment in the consumer-facing company exceeds over $135 million across seven firms this year. “Tiger’s bullishness for Indian consumer Internet companies is largely driven by saturation in the Chinese market.” said one of the venture capitalists who participated in Cred Series B round. He has requested anonymity.

According to the source, improved quality of startups and the unprecedented growth of the Internet users are other important drivers of Tiger Global’s interest in B2C firms. After abrupt resignation of Lee Fixel, who was leading the investment firm in India, Scott Shleifer took over the responsibility of private investments at Tiger Global.

“Since Shleifer is a new guy with a mandate of making private investments in India and elsewhere for Tiger, he intends to repeat Fixel’s playbook. Fixel was known for making a quick decision. Shleifer is trying the same strategy,” highlighted another VC who also requested anonymity.

Moreover, the opportunity in consumer internet has widened in the past 12-18 months with new startups emerged for seizing the opportunity. While SoftBank and DST busy in backing category leaders (companies which are top in the pyramid), opportunities to back growth-stage firms are profound.

The increasing interest of Tiger Global in B2C, as well as B2B startups, is a good sign for the overall ecosystem. Its investment in four companies within a month hint that it won’t shy away from backing more companies this year. Whether Tiger Global would follow spray and pray approach as it adopted during its first coming (2012-16) is remain to be observed.