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Tiger Global strongly encouraged the start-up economy during the pandemic, investing heavily in several startups, and launching start-up wars despite uncertainty that resulted in extremely high valuations. In 2021 alone, the hedge fund contributed 315 basicsaccording to PitchBook data.
And more about VC firms he didn’t like it, even then. At the end of 2021, the New York company encouraged investors to pay $ 12.7 billion for its fifteenth fund (called PIP 15) and then began to cultivate the capital to start again in the next few months. By May 2022, most of the money in the fund had already been invested. TechCrunch reported.
The company’s investment strategy backfired. As the US Fed began to raise interest rates rapidly in 2022, funds increased and the number of defaulters fell sharply. And, as 2024 closes, the effects of Tiger’s influence it still feels like the basics are still rough do not meet their target in 2021.
And here’s the thing: A recent disclosure by one of Tiger’s investors shows that Tiger Global’s 15th fund is poor, while many other funds at the time have returned little.
As of June 30 2024, the paper loss on Tiger Global PIP 15 exceeds 15%, according to the latest release. report from the California State Teachers’ Retirement System (CalSTRS), one of Tiger’s investors. Such a large loss would put the fund at less than 10 percent of total revenue in 2021, according to the latest. PitchBook Benchmarks.
The company posted a number of revenue gains, including Superhuman email, down 45%, search engine DuckDuckGo down 72% and NFT marketplace OpenSea up 94%, Bloomberg said last year.
Tiger Global and CalSTRS declined to comment.
It is true that a VC fund usually takes 10 years before everything it acquires is not paper, but locked in, in an exit or other financial transaction. It is therefore possible that some of these companies will return to exceed their 2021 targets.
However, some past 2021 investments in the CalSTRS portfolio are doing very well. For example, Valor Equity Partners’ five-year rate of return (a measure known as the rate of return) is 15.7%, according to the report. Currently, the 2021 funding from OakHC/FT, IVP, and GGV (which this year was changed to Famous Capital) produced returns of 8.7%, 4.1%, and 2.8%, respectively.
Although many large businesses, incl Andreessen Horowitz, General Catalystand Little Perkinsmanaged to raise more capital this year, Tiger Global scaled back its market ambitions in part because it was unable to raise as much capital as it had originally sought. In particular, in October 2022, Tiger Global planned to raise $ 6 billion to fund its sixteen markets. The amount was later changed to $5 billion, The Wall Street Journal said.
But the New York company failed to raise even half of its new goal. After nearly 18 months of fundraising, PIP 16 closed with just $2.2 billion in transactions earlier this year, Bloomberg said. That’s still a big bag. But not compared to his old ambitions.
However, Tiger Global still has a large military chest to deploy for startups. So far this year, the company has participated in 24 VC deals, including Waymo, OpenAI, Scale AI and Wiz, according to PitchBook data.
Although nearly three years have passed since Tiger Global’s financial turmoil, it will take time for the company to shake off its reputation as a decision-maker who made the wrong bet during the pandemic.
Some of the people who were in charge at that time of the rapid fire VC investment process are no longer on the firm. John Curtius, one of the leading VCs at Tiger Global, he left the company at the end of 2022 to start his own company, called Cedar Investment Management. According to reports, the company wants to raise $1 billion. It is not known whether the money was raised or if it started making money. Head of VC for Tiger Global Scott Shleifer also changed for the role of counselor at the beginning of the year.
