SUMMARY
Tiger Global has stated that the market is buoyed by strong macro and demographic tailwinds, and thus, investment in India is one of its primary focus
Besides enterprise tech, this VC fund’s focus areas include fintech, consumer tech, artificial intelligence, machine learning and automation
The VC firm will mark the first close of Fund 16 in mid-January 2023
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US-based venture capital firm Tiger Global Management is targeting $6 Bn for its next venture fund. The 15th vehicle of the Private Investment Partners Fund called PIP Fund 16 (it skipped Fund 13), will invest ‘largely in enterprise themes and in India’ and ‘in a lower-valuation environment’.
According to a letter to its investors, Tiger Global stated that PIP 16 will benefit from differentiated access to compelling early-stage internet-based startups. Sectors that the VC firm is targeting include enterprise software, fintech and consumer companies, besides artificial intelligence, machine learning and automation.
“In India, where we have built a leading brand and portfolio over more than 15 years, both B2B and consumer categories are significantly underpenetrated relative to other large markets,” it said, adding that the market is buoyed by strong macro and demographic tailwinds.
Fund 15 marked its final close in mid-2022 raising $12.7 Bn. Despite being worth only $6 Bn, Fund 16 is Tiger Global’s second biggest fund.
The letter also added that the new fund will also make ‘opportunistic’ follow-on investments, including through secondary share purchases. The late stage focussed VC will also make more early stage bets, investors have been told.
Amid the market volatility, the fund is less than the anticipated $8 Bn fund that some of its investors had previously been told about. Its investors are likely to include founder Chase Coleman and partner Scott Shleifer, among others. Employees of Tiger Global are also likely to put $500 Mn in the PIP 16 pool.
The news of its 15th vehicle also follows the exit of one of its partners John Curtis, who was responsible for B2B and enterprise tech deals – something that the VC firm is likely to be focussed on with the current fund.
The VC firm will mark the first close of Fund 16 in mid-January 2023, the letter stated.
Tiger’s Increasing India Focus
Tiger Global claims to have reduced its average ticket size to $30 Mn, as opposed to the typical $50 Mn.
Not only that, it has investments worth $45 Bn across the globe, with 100+ investments in India alone. A whopping 30% of its portfolio in India is now in the unicorn club.
Between 2021 and 2022 (ongoing), Tiger Global has participated in over 85 funding deals including that of Pristyn Care, Koo, CoinSwitch Kuber, Moglix, Apna, slice, Captain Fresh, CRED, OfBusiness, Chaayos, Reshamandi and more.
In a first in India, Tiger Global also backed ecommerce enablement startup Shopflo in its seed round.
The VC firm did not remain untouched by the market volatility, as fundraising became harder, valuations declined and the cost of capital increased.
Further, certain issues plagued its portfolio startups including BYJU’S (profitability concerns), Infra.Market (IT raids), Unacademy and Vedantu (massive layoffs), Ola (alleged cheating case), and more.
But the VC firm claims that fundamentals remain strong and many of its startups are going to go for an IPO when the ‘market is supportive’.
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