New York-based global hedge fund Tiger Global Management, among the world’s most prolific investors in startups and technology companies, might not be killing it these days unlike before 2016 when it backed more than 73 startups in India beginning with Flipkart in 2010, but India has continued to be its second largest market.
Tiger Global, which made earlier bets into companies like LinkedIn, Facebook along with other tech giants such as Alphabet, Amazon, Netflix, Alibaba etc., has made maximum investments in India after the US ever since it was launched in 2001.
According to deals tracker Crunchbase, “Indian companies have attracted more than 30 per cent of Tiger Global’s total reported investment deals since Tiger’s first fund.”
Since its inception, Tiger Global has raised around $16 billion through 11 funds that it has launched so far.
While the percentage of investments made by Tiger Global in the US companies is slightly higher to 37.4 per cent, interestingly, China has remained at a distant third position with just 11.1 per cent of the total reported deals.
“When they (Tiger Global) started investing, India was a bigger opportunity than China even as the likes of Alibaba had already taken off in terms of size,” Harish HV, former Partner, India Leadership team, Grant Thornton India told Financial Express Online.
On the other hand, it helped Indian startups to scale at a speed that India had never seen before. So they thought that India is a place where they can make a big difference and put a lot of money, Harish added.
Tiger Global has so far made 292 investments since its launch and has led 162 of them. Out of the total investments, more than 80 investments have been made in India, as per Crunchbase data.
An email sent to Tiger Global didn’t elicit any response.
The fund started investing in China in 2003 and since then had backed companies other than Alibaba including JD.com in which it put massive $1.75 billion across two rounds in 2011 and 2012. E-learning startup 17zuoye, vegetable selling app Meicai, music education portal Peilian, textile e-commerce firm Baibu, industrial products distribution platform Zhenkunhang, have been other key investments made by Tiger Global in China.
“Why investors like Tiger Global are investing more in India than China is because Chinese economy is going through a slowdown and also since it is more of a saturated market while India remains a virgin market which is 7-10 years behind China,” said Sushanto Mitra, Founder and CEO, Lead Angels.
Tiger Global had significantly pulled itself back from the Indian startup ecosystem after the funding euphoria of 2015 and before. In fact, it made just seven investments in 2016 and 2017. Globally too, it made just 20 investments without raising a new fund until last year when it raised close to $3.8 billion for its 11th fund.
“They decided to take a pause at that particular point in time to see how their investments perform before jumping into the game again,” said Harish.
Since October 2017, Tiger Global has led multiple early-stage investments including $2 million round in tea startup Chaayos, $6 million in over-the-top video platform The Viral Fever, $3 million in CheckMate – a startup that helps restaurants in managing multiple food ordering apps, and $6.4 million in facilities management software startup Facilio.
Its return to early-stage funding, however, seems contrary to what it is expected to do — ie, backing mid-stage startups, after multiple of its earlier bets such as Zopper, Zo Rooms, Little, Cube26, etc., either got shut or acquired.
“There are five-six venture capital investors who have raised their new rounds to focus on mid-stage startups as early-stage is now fraught with risks. So the general sense across VCs is that Tiger Global also is going to invest in mid-stage. However, it may go completely different,” Suresh Jayaraju, Senior Director, Head,10000 Startups, Nasscom told Financial Express Online earlier.
Tiger Global had invested in $1 billion in Flipkart Group. Part exiting Flipkart in the historic buyout of India’s e-commerce poster boy by US retail behemoth Walmart for $16 billion earlier this year, returned $3.3 billion to Tiger Global. It still holds 5% in Flipkart.