TLDR:
- Tiger Global’s VC fund closed 63% below the target with $2.2 billion, well short of the $6 billion target.
- Facing a challenging fundraising climate, Tiger Global gathered the smallest fundraising haul in roughly a decade.
Tiger Global Management closed its latest venture-capital fund, Private Investment Partners 16, with $2.2 billion, significantly below its $6 billion target. This marks the first time a Tiger venture pool attracted less cash than its predecessor. The firm, led by founder Chase Coleman, had been experiencing robust investor demand in the past, raising successively larger funds. However, with reduced investor interest in VC and private equity bets due to valuation declines and deal scarcity, companies like Tiger Global are struggling to meet fundraising targets. The difficult climate has affected other firms like Apollo Global Management Inc., Carlyle Group Inc., and Insight Partners, with many missing or reducing their fundraising goals.
Tiger Global has faced challenges in recent years, including replacing its venture chief Scott Shleifer with founder Chase Coleman, following a downturn in the industry. The firm’s previous fund, PIP 15, was marked down by 18% at the end of September, contributing to the fund’s struggle to reach its $6 billion target for PIP 16. The firm had initially aimed to raise $8 billion for PIP 16, but revised it to $5 billion in early 2023 due to market conditions. Even after extending the fundraising period, PIP 16 only managed to collect $2.06 billion by June.
Despite the challenges, Tiger Global remains committed to backing startups, primarily in enterprise technology in the US and India, over the next few years. The fund’s insiders, who are typically the largest investors, have increased their stake in the fund to account for 20% of its assets. Tiger Global is focused on rebounding from a decline in assets from $100 billion in 2021 to $50 billion in September 2022, with the majority in the venture arm. While the hedge and long-only funds posted gains last year, they are still recovering from losses in 2022. Overall, the challenging fundraising environment highlights the shifting landscape for VC and private equity firms.
