Prolific Tiger Global Management Maintains Strong Investment Posture

Although relatively secretive in the way it navigates new opportunities and emerging markets, investment firm Tiger Global Management continues to flex its strength through quiet and purposeful fundraising, investments, and exits.

It’s this intriguing posture that has prompted Crunchbase News to explore the past, present, and potential future of the venture.

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Tiger Global was created by Chase Coleman in 2001, a former tech analyst at Tiger Management Corp., which was a separate hedge fund managed by Julian Robertson.

The hedge fund closed in 2000 and according to Business Insider, Robertson gave Coleman $25 million to start his own technology fund, which would later become what we now know as Tiger Global Management, an investment firm with both a hedge fund and a private investment vehicle.

The firm has since become a prolific venture investor in the technology world. In October 2018, the group raised its eleventh private investment fund at nearly $3.8 billion, representing its largest fund to date, and one of the largest announced last year.

That capital has been funneled into over 250 companies since its inception. Some of its earlier bets include late secondary market transactions into LinkedIn and Facebook before those companies’ public debuts. According to Forbes, Tiger Global made $1 billion off of its Facebook bet alone.

Tiger Global hasn’t exclusively invested in growth stage companies that are about to go public. Per its founder’s LinkedIn page, Tiger’s private equity strategy, which is led by Lee Fixel, has a “ten-year investment horizon and targets growth-oriented private companies.”

That statement was supported by InVision COO David Fraga who told Crunchbase News that Tiger Global has supported growth strategies that emphasize long term success over “over-optimization” in the short term. The firm first invested in Invision in 2013 and 2014, leading the company’s Series A and B rounds.

A full 30 percent of Tiger Global’s investments since its inception have been directed toward early stage (Series A and B) startups, with 20.5 percent alone being directed toward Series C startups.

Beginning in 2011, the firm’s investment cadence began to pick up significantly.

That year, the firm made multiple investments in now well reported U.S. companies. For example, Tiger Global joined Kleiner Perkins, participating in Square’s $100 million Series C in 2011. That year, it also led direct-to-consumer glasses startup Warby Parker’s $12 million Series A as well as Eventbrite’s $50 million Series E. It doubled down on both investments in 2013.

Other notable investments include recruiting website Glassdoor, CRM platform Freshworks, direct-to-consumer shaving company Harry’s and stationary bike company Peloton, which is reportedly prepping for an IPO.

Putting The Global In Tiger Global

Tiger Global has also made a name for itself on the global investment stage, particularly in emerging markets in China and India, as the following chart depicts.

As you can see, 60 percent of Tiger Global’s bets were made in companies located outside of the U.S. Indian companies have attracted more than 30 percent of Tiger Global’s total reported investment deals since Tiger’s first fund. Startups based in China attracted 11 percent of the firm’s investments.

The firm began investing internationally in China as early as 2003. Since then, it has funneled cash into other companies, including Alibaba rival JD.com. Tiger Global first participated in the company’s $1.5 billion Series C in March 2011, doubling down on that investment in JD’s $250 million Series D in November 2012.

Interestingly, Tiger Global led online learning platform company 17zuoye’s $20 million Series C in 2014. The edtech company made headlines in 2018 for raising $450 million in total from Toutiao and Singapore-based Temasek. It has also led massive, supergiant investments in Meicai, a China-based vegetable selling app, and SenseTime, the Beijing-based artificial intelligence giant, among others.

India

Perhaps even more interesting than its Asian presence is Tiger Global’s huge bet on India’s emerging market, where it was among the first U.S. investors to take interest in the region. The group’s first lead investment in the country was e-commerce company Flipkart’s Series B in June 2010. Since then, Tiger Global has made more than 80 investment deals in India, according to Crunchbase.

Pankaj Jain, a former Partner at 500 Startups in India, told Crunchbase News that growth in internet usage in India drove more interest in the startup community there.

“2010 I think was a real tipping point when it came to startups in India,” Jain said. “You started seeing e-commerce companies like Flipkart getting real traction, you started seeing other companies like SnapDeal raise money relatively quickly, looking at selling online.”

He also added that because of the relative volatility of the hedge fund investment market at the time, funds like Tiger Global and Falcon Edge may have been looking for alternatives to hedge fund and fixed income activities. Further, the hold that Silicon Valley had on the startup ecosystem in the U.S., he believes, could have motivated some of those funds to look more closely at fast growing global markets like China and India.

“[Tiger Global] was like no other large investor in India. They would do all their homework beforehand, they would identify which companies they liked and why. They would meet with those companies and they would make a decision almost instantaneously,” Jain said. “They wouldn’t take three months of due diligence to make a decision–they would have done a lot of their due diligence before they even came.”

By 2015 the growth in mobile internet usage following the launch of low priced 4g services pushed that market potential forward. In the years following that first Flipkart investment, Tiger Global continued to double down on investments in Flipkart, as well as fashion e-commerce company Myntra, and taxi-hailing app Ola.

“At 500 we were doing a lot of small checks at the seed stage. In 2015, Tiger came and said, ‘Hey, we’re going to employ that same strategy at the Series A stage.’” That year, the fund led or participated in 33 deals in India, 60 percent of which were early stage rounds, according to Crunchbase. Tiger’s activity in 2015 “set off a frenzy,” according to Jain, attracting other investors from Japan and China, particularly ones Tiger had worked with before.

Scaling Back

Tiger Global slowed down following that rapid increase in check writing. In 2016 and 2017 the company made just seven investments in the country. That slowing cadence was also prevalent outside of India. Tiger Global made just 20 investments overall and did not raise a new fund.

It seems the group instead has shifted to finding an exit for its main investments. A number of Tiger Global’s portfolio companies were acquired in 2017 and 2018. Those M&A exits included Dubai-based Souq, which was acquired by Amazon for $580 million in May 2017. Other exits passed the $1 billion mark. Brazilian ride-hailing service 99 was purchased by Didi Chuxing for $1 billion in January 2018, Glassdoor was acquired by Recruit Holdings for $1.2 billion in May 2018, and Flipkart struck a $16 billion deal with Walmart in May 2018. Other portfolio companies like JD.com and Spotify went the public route.

Tiger Global 11

The group now seems to be heating up again, investing 53 times since the beginning of 2018, leading 42 of those deals. About 70 percent of the Tiger Global-led deals were for late-stage startups, and nearly half were for startups based in the U.S., with the fund leading only four investments in India and 12 in China.

While the fund may not be making headlines for its investments in India at the moment, it’s still grabbing people’s’ attention, investing in new and non-traditional verticals. One of those non-traditional bets is cannabis.

Tiger Global invested alongside Snoop Dogg’s Casa Verde Capital in cannabis regulation-focused startup Metrc. It also led cannabis-focused point of sale platform Green Bits‘ Series A, again with Casa Verde. And from what Green Bits CRO Charlie Wilson told Crunchbase News in an email, it seems that Tiger Global came prepared to invest in cannabis, much like it was prepared to invest in India.

“Tiger Global was ahead of nearly all their peers, demonstrating not just curiosity but a commitment to make investments in this massive category,” Wilson wrote. “They identified Green Bits as the leader in retail technology and didn’t hesitate.”

With $3.8 billion to deploy, we can likely expect Tiger Global to continue to lead in emerging verticals and markets and grace the headlines of tech media everywhere, whether it wants to or not.

Illustration: Li-Anne Dias

Editorial Note: A previous version of this article stated that Tiger Global Management is a hedge fund with public and private equity vehicles. A Tiger Global spokesperson clarified Tiger Global’s structure, and it has since been updated.