Tiger Global Management has raised $2.7 billion for its latest private equity (PE) fund, according to its securities filing on Friday. It had effectively missed the $6 billion target for its 16th fund by 55 per cent.
In March 2022, the New York-based venture capital (VC) major raised $12.7 billion for its Fund 15 and started fundraising campaigning for the next fund in October.
A Financial Times report stated that the company hopes to raise capital from large institutional investors like pension and sovereign wealth funds and high-net individuals at large brokerages like Morgan Stanley.
In February this year, The Wall Street Journal (WSJ) reported that Tiger Global decided to significantly reduce its original goal of fundraising $12.7 billion, aiming for a more plausible $5 billion. This decision was unsurprising considering the rising cautionary note sounded by investors amidst their worries that start-up valuations are over-inflated and need correction.
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WSJ reported in May 2023 that Tiger Global had marked down its global VC portfolio by 33 per cent, which erased $23 billion in value from its global start-up holdings. It claimed that its newest VC fund lost between 9 per cent and 25 per cent in the fourth quarter.
Incidentally, SoftBank Group too reported that its $48 billion Vision Fund 2 saw an approximately 30 per cent dip in valuations of its private investments between April and December.
Tiger Global is not the only VC worldwide that has been finding it challenging to attract new investors, despite having $60 billion in assets. According to reports, US-based TCV, too, missed the $5.5 billion target it had set for a flagship fund last year. Securities filings and a document compiled by one of its limited partners (LPs) found that the 28-year-old VC company managed to raise 50 per cent to 75 per cent less capital than expected.
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Similarly, Insight Partners scaled back on the flagship fund it had initially planned. The New York-headquartered private equity (PE) company hoped to close a $20 billion after successfully closing on a similarly sized fund earlier in 2022. However, in July, Bloomberg reported that it cut down its fundraising goal to $15 billion following what the company cited "great reset in tech".
Founded by Chase Coleman in 2001, Tiger Global has backed several start-ups, including ByteDance, the parent company of TikTok, fashion ecommerce platform Shein and ChatGPT chatbot’s creator OpenAI. The Financial Times has invested over $20 billion in private start-ups since 2020.
Closer home, Tiger Global has invested in several unicorns, including Ola, DealShare, Games24x7, Open, CRED, Sharechat, Delhivery, Groww, Unacademy, Dream11 and BharatPe. It also made partial exits from start-ups like Freshworks, Zomato, Policybazaar and Delhivery. It is speculated that it plans to sell its stake in online food delivery platform, Zomato.
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