Tiger Global Launches $2.2B Fund with Cautious Approach

Tiger Global Launches New Fund Amidst Market Shift

Tiger Global, a prominent investment firm instrumental in fueling the venture capital boom of 2020-2021, is currently seeking to establish a new $2.2 billion fund.

Details of the New Fund

A letter addressed to prospective limited partners, as reviewed by CNBC, details the firm’s intention to secure capital for a new investment vehicle, designated Private Investment Partners 17 (PIP 17).

This initiative signals a shift in strategy, promising a more measured investment approach compared to the aggressive tactics employed during the peak of the 2021 bull market.

The "Spray and Pray" Era

During the 2021 market surge, Tiger Global adopted a rapid investment strategy, often referred to within the venture industry as “spray and pray.”

This involved making numerous investments quickly, aiming for a high probability of success through sheer volume.

PIP 15: A Record-Breaking Fund

In 2021, the firm successfully raised PIP 15, a substantial $12.7 billion fund.

This fund deployed capital into startups at an accelerated rate, frequently at inflated valuations, as reported by TechCrunch.

Prolific Investment Activity in 2021

Data from PitchBook indicates that Tiger Global invested in an impressive 315 startups during 2021 alone.

This activity intensified competition among venture capitalists, driving up valuations for even early-stage companies.

Market Correction and Subsequent Changes

The rise in interest rates brought an end to the exuberant market conditions, forcing startups to contend with their 2021 valuations.

Many companies struggled to justify these valuations, leading to closures and restructuring.

Leadership Transitions at Tiger Global

Following the venture market downturn in 2022-2023, key investor John Curtius departed to launch his own fund.

Scott Shleifer, the firm’s head of private equity investments, transitioned to an advisory capacity, while founder Chase Coleman assumed a more active role in investment decisions.

PIP 16: A Smaller, Yet Significant Fund

Tiger Global subsequently raised a smaller PIP 16 fund, totaling $2.2 billion in 2024, as reported by Bloomberg.

Despite its reduced size, this fund remains a considerable investment vehicle.

PIP 17: Leveraging AI Success

The launch of PIP 17 is being propelled by the strong performance of PIP 16, particularly its investments in artificial intelligence companies.

PIP 16 holds stakes in leading AI firms such as OpenAI, Waymo, and Databricks, which have experienced substantial valuation increases.

These investments have generated paper gains of 33% for the fund to date, according to CNBC’s reporting.

A More Cautious Approach

Acknowledging the potential risks, the letter to limited partners emphasizes a more focused investment strategy.

It recognizes that investments in AI, while promising, carry inherent risks due to “elevated” valuations that may not always be supported by underlying company fundamentals.

Acknowledging Potential Market Bubbles

Essentially, Tiger Global is signaling awareness of a potential bubble in the AI market.

The firm aims to avoid further inflating valuations to unsustainable levels, even while actively pursuing new opportunities in the AI sector.

(Tiger Global was unavailable for immediate comment.)