Tiger global – most active venture investors into India – turning cautious

By: | Updated: June 29, 2016 7:01 AM

Tiger Global, which till last year was among the most active venture capital investors betting on India, seems to be taking a break.

A senior partner of a PE fund that has partnered Tiger in some ventures says it has a list of ventures it will no longer support. (Reuters)A senior partner of a PE fund that has partnered Tiger in some ventures says it has a list of ventures it will no longer support. (Reuters)

Faltering revenues, fickle customers and frothy balance sheets appear to have made investors cautious about moving money into India’s e-commerce space. Tiger Global, which till last year was among the most active venture capital investors betting on India, seems to be taking a break. The New York-based fund, whose India portfolio has 34 companies, has written out just three cheques in 2016, according to Crunchbase, an online database of start-up investments. That’s against 26 last year.

A senior partner of a PE fund that has partnered Tiger in some ventures says it has a list of ventures it will no longer support. “The second list comprises firms it will fund in future rounds provided there’s a lead investor,” the executive said. Among Tiger Global’s investee companies reportedly looking for funds are logistics player Delhivery, taxi-hailing service Ola, e-retailer Flipkart and online hotel rooms aggregator Zo Rooms, which failed to merge with OYO rooms.

“Delhivery has been in the market for nearly six months now. Initially it was looking for around $150 million at a valuation of $700 million but now it’s willing to settle for a lower valuation,” a source familiar with the development said.

Delhivery reported an over threefold rise in losses to Rs 71.08 crore for the year ended March 2015, according to a filing with the registrar of companies. Zostel Hospitality, which runs Zo Rooms, posted revenues of Rs 2.7 crore in the year ended March 2015 compared with Rs 27.3 lakh in the previous year. It posted a profit of Rs 2.3 lakh in the year ended March 31, 2014, according to data available with the registrar of companies.

Meanwhile, taxi-hailing service Ola, in which Tiger co-invested in a $500-million funding round in November last year, is being supported by other investors like SoftBank and Chinese taxi hailing service Didi Chuxing. Tiger, sources added, may not chip in significantly when Ola next raises money. Ola ran up losses of Rs 796 crore for the fiscal year ended 2015, according to regulatory filings made by the company. Meanwhile, digital entertainment network TVF Play, online music platform Saavn and online fashion-focused social networking platform Roposo are yet to receive investment commitments for the next round from Tiger, sources told FE.

In another development, Tiger Global’s India managing director Kalyan Krishnamurthy has moved to head the category management division at Flipkart. This is not surprising, say industry watchers, since the e-retailer has received the biggest chunk of Tiger’s $2.5 billion investment in India at around $1 billion. Krishnamurthy was working directly with Lee Fixel, Tiger’s global head of private investments. “Tiger is understandably supporting Flipkart,” said Hitesh Gupta, founder of VCBytes, a start-up advisory firm. Gupta believes Tiger may be looking to stem the cash burn and subsequently rope in new investors. “That way it can hope for an exit at some point though it’s the new investors who will set the valuations in the forthcoming rounds,” he said.

Emails sent to both Flipkart and Tiger Global remained unanswered.

Flipkart reported losses to the tune of Rs 1932.9 crore in FY15 and has seen its valuation decline from $15.2 billion to $ 9 billion in a series of markdowns by its investors.

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