As we noted six months ago, Tiger Global Management, the 17-year-old investment group, is starting to see a whole lot of its venture-related startup investments pay off. We also guessed that because of those wins, the outfit was likely lining up commitments for a new mega fund.
It was a safe bet. According to a new report from the Financial Times, the New York-based outfit has just closed its newest venture vehicle with $3.75 billion after actively marketing it for just six weeks.
That makes Tiger’s new vehicle one of the largest venture funds in a world dotted with ever-bigger pools of capital, including SoftBank’s massive $93 billion Vision Fund, which closed last year, and the newest global fund assembled by Sequoia, which closed with $8 billion in capital commitments in late summer, a record-breaking amount for the storied venture firm.
In fact, Tiger’s new fund may be the second largest venture fund to close so far this year, just beating out YF Capital’s newest pool, which closed with $2.5 billion in July, and numerous other firms to close billion-dollar-plus funds in 2018, including Tunlan Investment’s Xiong’An Global Blockchain Innovation Fund, which closed in April with $1.6 billion; Lightspeed Venture Partners, which closed on $1.8 billion in capital across two new funds in July; and General Catalyst, which gathered up at least $1.375 billion in capital commitments earlier this year.
According to the FT, the Tiger fund closed exactly a week ago and will focus on consumer Internet, cloud computing, Industry software as well as direct-to-consumer companies in the U.S., China and, India, where, according to The Economic Times, Tiger is stepping up its investments after hitting the pause button for a few years.
Tiger’s apparent inspiration: the reported $3.3 billion it recently made from an early bet on Flipkart, which sold the majority of its e-commerce business to retail leviathan Walmart in May for $16 billion.
Other recent exits that Tiger’s investors have surely liked seeing include the sale of Glassdoor, the jobs and salary website, that was acquired by the Japanese human resources company Recruit Holdings for $1.2 billion in cash back in May; and Spotify’s direct listing on the stock market back in April. Tiger owned 7.2 percent of the streaming media company as of its first day of trading. The listing provided Spotify with a market cap of $30 billion; its current market cap is down slightly to $26 billion.
Even more recently, Eventbrite and SurveyMonkey — two Tiger portfolio companies — have gone public, though both have handed back some gains since their IPOs last month. Eventbrite opened at $36 per share and is currently trading at $26 per share; SurveyMonkey has lost roughly one-third of its value since its first trading day.
Tiger was founded by Chase Coleman, a protégé of hedge fund pioneer Julian Robertson. According to the FT, the outfit now manages roughly $26 billion and about half of that is being funneled into venture-backed startups, with portfolio manager Lee Fixel largely overseeing its venture bets.
Some of its investments have been contrarian and underscore the extent to which Tiger is not like other investment firms. it took a stake of more than $1 billion in SoftBank Group earlier this year, for example. Tiger is also an investor in the e-cig company Juul, which has come under intense regulatory scrutiny in recent months but remains among the fastest-growing companies in the Bay Area right now.
Interestingly, even SoftBank’s Vision Fund — which is currently in an uncomfortable public position, having raised nearly half its money from Saudi Arabia’s Crown Prince Mohammed bin Salman — couldn’t invest in the company if it wanted to. According to Jeff Housenbold, a managing director with SoftBank’s Vision Fund, like many other venture investors, SoftBank has prohibitive clauses in its agreement with its own backers that include pornography, alcohol, drugs, weapons and tobacco.
Whether Tiger has also raised money from sovereign wealth funds, we don’t know. The firm has never publicly disclosed who, beyond its employees, owns shares in the firm.
