Tiger Global is offloading its program management to a major venture capital fund, a shift for the tech investor that epitomizes Silicon Valley’s startup mania.
The New York-based manager told investors he was lowering the target size for his latest fund to $5 billion, down from the $6 billion target it started raising last fall, people familiar with the matter said. to give The $6 billion itself was far short of Tiger’s initial expectations that it could raise a fund roughly comparable to its last fund, which totaled $12.7 billion. Some investors said.
The startup market has gone from cool to frozen over the past year as investors shy away from risky investments, such as unprofitable startups, in response to higher interest rates. Shares of privately traded tech companies have fallen at discounts ranging from about 30 to 40 percent to 80 percent off valuations from previous fundraisings.
The tech giant’s trade has been battered by tech stocks, with index hedge funds and long-dated mutual funds posting historic losses. Its hedge funds have been slower to shed assets, but its portfolio was heavy in many areas, including fintech and business software.
Tiger backed more startup deals in 2021 than any other firm in the US, sometimes committing large investments in high-value startups just hours after initial meetings with founders. He relied heavily on management consultants to help evaluate startups and conduct due diligence. Tiger invested most of its latest venture fund — a $12.7 billion vehicle raised in 2021 and 2022 that was one of the largest startup capitals ever raised — as valuations rose and concerns about a bubble rose.
As the market deteriorated, Tiger began to pull back on the pace of deals and began investing earlier in the life of companies.
— Juliette Chung contributed to this article.
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It appeared in print on February 2, 2023 with the headline “Tiger Fund reviews its target for investments”.