substantially smaller than the $12.7 billion technology vehicle it had closed earlier this year, as per international media reports.
Sources familiar with the matter told ET that the fund size was initially planned for over $8 billion.
Tiger said that over the past years it has invested a majority of PIP (Tiger Global Private Investment Partners LP) 15 in early-stage enterprise software and fintechs in the US and India, where it continues to find the highest-risk adjusted returns.
Among the largest tech-focussed finds globally, Tiger said India’s OfBusiness, a business-to-business (B2B) ecommerce firm for raw material procurement, has been one of such bet where it has a meaningful holding and the business has grown quickly with compelling margins. OfBusiness, which is also backed by SoftBank and Alpha Wave, is valued at nearly $5 billion.
According to Tiger Global its average investment size has decreased to $30 million, as it was able to “invest small amounts for meaningful ownership in leading businesses”. ET reported about Tiger going early with
seed investments in startups.
“Since inception in 2003, the PIP (Tiger Global Private Investment Partners LP) our funds have called over $36 billion, distributed $30 billion and generated a 34% gross IRR (internal rate of return). These results are driven in part by the 12 individual investments that have each produced more than $1 billion in gains,” Tiger Global said in its investor letter, which has been reviewed by ET. US publication Axios first reported about it.
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Internal rate of return (IRR) is a metric used in venture capital investing to compare a fund’s performance across years.
“We anticipate that PIP 16 will similarly benefit from the differentiated access to compelling early-stage investments largely in enterprise themes and in India, and will do so in a lower-valuation market […]. In India, where we have built a leading brand and portfolio over more than 15 years , both B2B and consumer categories are significantly under penetrated relative to other large markets,” said Tiger Global’s letter to investors. PIP 16 will be Tiger Global’s 15th fund (it skipped No 13 for auspicious reasons).
According to the fund, which has previously backed the likes of Flipkart, Delhivery, Ola, Zomato, among many others, its remaining portfolio represents $45 billion of fair value, concentrated in high-quality market leaders and many of the best-run and most valuable private internet companies in the world, including ByteDance (TikTok parent), Stripe, Razorpay, Flipkart and Databricks.
Tiger plans to make its first close of its latest Tiger Global Private Investment partners XVI LP (PIP 16) fund on January 18, 2023, and will continue its focus on enterprise software, fintech and consumer companies globally, the fund said in its note.
ET reported on July 11, that Alex Cook, partner and one of the top lieutenants of the fund’s global head for private investments– Scott Shleifer–, told a group of Indian founders that it will not shy away from issuing cheques for follow-on investments for its best performing firms from the current portfolio, even as late-stage funding has slowed for Indian startups. Venture funding for the September quarter was at $2.7 billion compared to $6.7 billion in the preceding quarter this year, data from Venture Intelligence showed. Compared on a year-to-year basis, Indian startups had seen nearly $12 billion of investments during the September quarter last year–a record period for startup investments in India.
Tiger Global’s latest fund comes at a time when it has
lost billion of dollars in this year’s technology meltdown, forcing it to reduce positions across its public listed portfolio of software maker, Snowflake; used car selling platform, Carvana, retailer JD.com; food delivery app, Dash and cryptocurrency player, Coinbase. Earlier this week, The Information reported that Tiger Global Management partner John Curtius plans to leave the firm next year to launch his own fund called Cedar Investment Management.
According to a separate investor letter, earlier this year, Tiger’s flagship fund gained 0.4% in July, putting year-to-date losses at 49.8%, the Financial Times had reported.
“The investment environment has changed significantly in recent quarters. Public market valuations declined quickly and meaningfully in our focus areas, subsequently depressing valuations and deal activity in private markets as the cost of capital increased. For the PIP funds, uncertain and volatile market environments have yielded some of our best performers since inception,” Tiger said in its October 6 letter to investors.
Its first fund was invested during the dot-com bubble and the SARS epidemic, its fifth fund during the global financial crisis and tenth fund during a public market selloff in 2015 and 2016, it said assuring investors of growth.
Since the beginning of 2021, Tiger said that a record 41 portfolio companies completed their initial public offerings (IPO), and that the fund has capitalised on a period of high valuations to distribute $8.3 billion to its investors.
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