New York-based Tiger Global, one of the world’s largest and most aggressive technology investors, has increased early-stage investments in private companies through its newest venture capital fund.
The hedge fund company, which had raised nearly $13 billion for its latest and largest venture capital fund in March, told investors on May 16 that more than half of the fund’s investments were in Series A or Series B rounds, typically the first or second big financings for private tech companies, according to a report by the Financial Times.
This is a shift in strategy for one of the world’s most prolific tech investors, which usually invests in larger rounds at later stages in private companies. The shift comes after the hedge fund company’s total value of public stock positions fell to $26 billion at the end of the March quarter from over $46 billion in the previous quarter amid falling tech valuations across the world, the Financial Times report said citing Tiger Global’s regulatory filings.
To be sure, last week, Tiger Global marked its first seed-level bet in India, after it led a Rs 20 crore round in a software-as-a-service (SaaS) platform Shoplo.
The Financial Times report also said Tiger Global sold more than 70% of its stake in Coinbase, a Nasdaq-listed cryptocurrency exchange. The New York-based company also sold over 95% of its stake in software company UiPath.
Tiger Global’s shift in its investment strategy comes a week after another aggressive tech investor SoftBank said it will go slow on investments. The Masayoshi Son-led investment company said it will cut its investments to a fourth in 2022 from a year earlier after it recorded its highest-ever fiscal year loss of over $13 billion. Son also said that investment sizes will be smaller in the US and other major economies.
Tiger Global and SoftBank’s plans of slowing down on tech investments in India and elsewhere suggest more pain for the Indian startup ecosystem, which is already experiencing a funding crunch. Many startups have either laid off employees, shut down non-core verticals, or gone slow on expansion since the start of 2022. Private market investors are of the opinion that 2022 will be a year of consolidation for the Indian startup ecosystem that witnessed two consecutive years of hypergrowth.
Tiger Global and SoftBank have been aggressive investors in Indian tech startups, and the two venture capital firms have raised their bets significantly on Indian startups over the last two years.The two venture capital firms have also played a key role in helping India in becoming the world’s third-largest startup ecosystem. The two firms combined have backed as many as 60 of India’s 100 unicorns, according to Venture Intelligence, a data analytics firm.