Exclusive: Tiger Global is raising a new $3.75 billion venture fund, one year after closing its last

Connie Loizos
·6-min read
Scott Shleifer, partner and head of private equity at Tiger Global Management, right, speaks with an attendee during the UJA-Federation of New York Wall Street Dinner in New York, U.S., on Wednesday, Dec. 14, 2011.

According to a recent letter sent to its investors, Tiger Global Management, the New York-based investing powerhouse, is raising a new $3.75 billion venture fund called Tiger Private Investment Partners XIV that it expects to close in March.

The fund is Tiger Global's thirteenth venture fund, despite its title -- the partners might be superstitious -- and it comes hot on the heels of the firm's twelfth venture fund, closed exactly a year ago, also with $3.75 billion in capital commitments.

A spokesperson for the firm declined to comment on the letter or Tiger Global's broader fundraising strategy when reached this morning.

It's a lot of capital to target, even amid a sea of enormous new venture vehicles. New Enterprise Associates closed its newest fund with $3.6 billion last year. Lightspeed Venture Partners soon after announced $4 billion across three funds. Andreessen Horowitz, the youngest of the three firms, announced in November it had closed a pair of funds totaling $4.5 billion.

At the same time, Tiger Global seemingly has a strong case to present potential limited partners. Last year alone, numerous of its portfolio companies either went public or were acquired.

Yatsen Holding, the nearly five-year-old parent company of China-based cosmetics giant Perfect Diary, went public in November and is now valued at $14 billion. (Tiger Global's ownership stake didn't merit a mention on the company's regulatory filing.)

Tiger Global also quietly invested in the cloud-based data warehousing outfit Snowflake and, while again, it didn't have a big enough stake to be included in the company's S-1, even a tiny ownership percentage would be valuable, given that Snowflake is now valued at $85 billion.

And Tiger Global backed Root insurance, a nearly six-year-old, Columbus, Ohio-based insurance company that went public in November and currently boasts a market cap of $5.3 billion. Tiger owned 10.3% sailing into the offering.

As for M&A, Tiger Global saw at least three of its companies swallowed by bigger tech companies during 2020, including Postmates's all-stock sale to Uber for $2.65 billion; Credit Karma's $7 billion sale in cash and stock to Intuit; and the sale of Kustomer, which focused on customer service platforms and chatbots, for $1 billion to Facebook.

Tiger Global, whose roots are in hedge fund management, launched its private equity business in 2003, spearheaded by Chase Coleman, who'd previously worked for hedge-fund pioneer Julian Robertson at Tiger Management; and Scott Shleifer, who joined the firm in 2002 after spending three years with the Blackstone Group. Lee Fixel, who would become a key contributor in the business, joined in 2006.

Shleifer focused on China, Fixel focused on India and the rest of the firm's support team (it now has 22 investing professionals on staff) helped find deals in Brazil and Russia before beginning to focus more aggressively on opportunities in the U.S.

Every investing decision was eventually made by each of the three. Fixel left in 2019 to launch his own investment firm, Addition. Now Shleifer and Coleman are the firm's sole decision-makers.

Whether the firm eventually replaces Fixel is an open question, though it doesn't appear to be the plan. Tiger Global is known for grooming investors within its operations rather than hiring outsiders, so a new top lieutenant would almost surely come from its current team.

In the meantime, the firm's private equity arm -- which has written everything from Series A checks (Warby Parker) to checks in the multiple hundreds of millions of dollars -- is currently managing assets of $30 million, compared with the $49 billion that Tiger is managing more broadly.

A year ago, Tiger Global, which employs 100 people altogether, was reportedly managing $36.2 billion in assets.

According to the outfit's investor letter, the firm's gross internal rate of return across its 12 previous funds is 32%, while its net IRR is 24%.

Tiger Global's investors include a mix of sovereign wealth funds, foundations, endowments, pensions and its own employees, who are collectively believed to be the firm's biggest investors at this point.

Some of Tiger Global's biggest wins to date have included a $200 million bet on the e-commerce giant JD.com that produced a $5 billion for the firm. According to the WSJ, it also cleared more than $1 billion on the Chinese online-services platform Meituan, which went public in 2018.

Tiger Global also reportedly reaped $3 billion from majority sale of India's Flipkart to Walmart in 2018, though the Indian government has more recently been trying to recover $1.9 billion from the firm, claiming it has outstanding tax due on the sale of its share in the company.

One outcome that might surprise even Tiger Global's investors ties to the connected fitness company Peloton, 20% of which the firm owned at the time of Peloton's 2019 IPO (a deal that Fixel reportedly brought to the table, along with Flipkart). By adding new users throughout the pandemic, Peloton -- which was valued by private investors at $4 billion and doubled in value immediately as a publicly traded company -- now boasts a market cap of $48.6 billion.

Tiger Global has invested its current fund in roughly 50 companies over the last 12 months.

Among its newest bets is Blend, an eight-year-old, San Francisco-based digital lending platform that yesterday announced $300 million in Series G funding, including from Coatue, at a post-money valuation of $3.3 billion.

It also led the newly announced $450 million Series C round for Checkout.com, an eight-year-old, London-based online payments platform that is now valued at $15 billion. And it wrote a follow-on check to Cockroach Labs, the nearly six-year-old, New York-based distributed SQL database that just raised $160 million in Series E funding at a $2 billion valuation, just eight months after raising an $86.6 million Series D round.

Another of its newest, biggest bets centers on the online education platform Zuowebang, in China. Back in June, Tiger Global co-led a $750 million Series E round in the company.

Last month, it was back again, co-leading a $1.6 billion round in the distance-learning company.

Pictured: Scott Shleifer, partner and head of private equity at Tiger Global Management, right, speaks with an attendee during the UJA-Federation of New York Wall Street Dinner in New York, on Wednesday, Dec. 14, 2011.