Tiger Global falls well short of target with new $2.2B fund post global and Israeli investment cutback
Tiger Global falls well short of target with new $2.2B fund post global and Israeli investment cutback
Tiger Global was the most active investor in the U.S. and Israel in 2021, but never came close to reaching the $6 billion it hoped to raise for its new fund, suggesting a low appetite among institutional investors for VC investments, compounded by negative experiences with Tiger Global in recent years
The hedge fund Tiger Global managed to raise only $2.2 billion for its new venture capital fund, which is about a third of the $6 billion it sought to raise. This marks Tiger's smallest venture capital fund since 2014. For comparison, Tiger Global raised $12 billion for its previous fund, enabling it to become the most active investor in the U.S. and Israel in 2021.
According to a report in the Financial Times, Tiger has been trying to recruit investors for its 16th fund since October 2022. However, recruitment efforts have slowed significantly, with only $200 million in commitments received over the last nine months. The difficulties in recruiting suggest a low appetite among institutional investors for venture capital investments, compounded by investors' negative experiences with Tiger Global in recent years.
The fund gained prominence during the 2021 bubble period for its rapid investments in startups. External parties, primarily consulting firms, conducted due diligence on its behalf. Tiger Global became the market's most active investor, making a new investment sometimes daily. Despite leading rounds of over $100 million, it lacked influence in the companies due to its hands-off approach.
This strategy led to a collapse in returns in 2022, accelerated by the sale of shares in public tech companies and the departure of senior executives, notably Scott Shleifer, who led Tiger's private equity business.
In 2022, Tiger reported a negative return of around 30% to investors, with another decrease in 2023. To reduce exposure to startup investments, Tiger began selling off a large portfolio of holdings in private high-tech companies a year ago.
While Tiger still owns shares in several large private technology companies of the likes of Stripe, Databricks, Shein and ByteDance, it significantly reduced its venture capital activity last year, participating in fewer than 30 fundraising rounds, compared to around 300 in 2022.
Tiger’s reduced activity in Israel coincided with the departure of John Curtis, who oversaw Israeli investments. Tiger was involved in fundraising for the likes of VAST Data, Rapyd, Gong, Melio, Forter, Synk and many others and it still owns shares in a number of public Israeli tech companies issued in 2021.
