New York-based Tiger Global Management has raised $2.7 billion for its new fund, according to the US Security and Exchange Commission (SEC) filings filed on Friday. The capital raised is 55% less than the target fund of $6 billion set by the investment firm.
Also, this is 79% less than $12.7 billion raised by Tiger Global for its Fund 15 in March last year.
According to a Financial Times report, Tiger is seeking cash from large institutional investors such as pension and sovereign wealth funds and individuals with money at large brokerages like Morgan Stanley.
This is a significant development for the Indian startup ecosystem as Tiger Global has played a crucial role in the past few years in the country. For context, a large part of its $12.7 billion Fund 15 was deployed into Indian firms. Venture Intelligence data shows that it infused $677 million into Indian startups in 2022 and more than $1 billion in 2021. Ola, PharmEasy, CRED, Sharechat, Delhivery, Groww, Unacademy, Dream11, BharatPe, Gupshup and Infra.Market emerged as some of the top fundraising portfolio companies of the investment firm during this period.
As per data compiled by Fintrackr, Tiger Global invested in more than 50% of startups that turned unicorns in 2021. In 2022, it helped the likes of DealShare, Oxyzo, Games24x7, Polygon and Open to join the coveted club.
Meanwhile, the fund also made partial exits from its portfolio companies like Zomato, Policybazaar, Delhivery and most recently Freshworks.
However, a Bloomberg report highlighted that Tiger Global is seeking to raise new fund primarily to back enterprise startups in India amid a lower valuation environment.
This can be gauged from the investment pattern of the fund in India in 2022 and 2023. In 2021, it backed 64 startups in the country which fell to 50 in 2022. In the ongoing calendar year, it has backed only two companies: PhonePe and Infinite Uptime. While PhonePe is already in its portfolio, Pune-based Infinite Uptime became the first investment for the fund in India this year.
Globally, Insight Partners and TCV also had to slash their targeted fund size. As per media reports, TCV has raised 50% to 75% less capital for its next flagship fund whereas Insight Partners has raised only $2 billion for a fund targeting $20 billion. launched last June.
For a fund that did everything at scale, be it fund raising or investing in startups, the sheer size of Tiger Global’s bets has driven firms to unicorn status many times. Along with Softbank, the firm has been the reason venture funding has been almost as good, or even better, than an IPO for many startup founders. To that extent, a depleted Tiger Global, in combination with the pullback at Softbank, will directly impact unicorn making in India.
In fact, the relative absence of these funds to backstop their portfolio firms is already seeing large writedowns on many startup valuations by other, more conservative investors. With a portfolio that comprises a veritable who’s who of the startup ecosystem, Tiger’s absence is already sorting out those known for massive rounds from those who can survive to tell the tale.
