Tiger Global is falling behind in latest fundraising push

Tiger Global is falling short in its latest attempt to woo new investors, securing just over $2bn for a fund targeting $6bn after eight months, underscoring concerns over valuations of technology companies .

New York-based Tiger, which has $60 billion in assets, began raising money for its 16th private equity fund in October, which it believes has little intention of making fresh investments in companies.

It completed the fund’s “first close” – the point at which funds typically raise more than half of the targeted amount – in January and remains well short of the $6bn target, according to a securities filing on Friday. It’s still trying to raise more cash.

Tiger is the latest large venture firm that has struggled to raise funds. New York-based Insight Partners has raised just $2bn of the $20bn target fund it launched last June and this week told investors it was slashing its target to $15bn.

Venture capital funding has plunged over the past six months to levels not seen in a decade as investors soured on illiquid private markets and the value of technology companies crashed. US venture firms raised nearly $12 billion in the first quarter, down 73 percent from the same period last year.

Tiger is seeking cash from large institutional investors such as pension and sovereign wealth funds as well as wealthy individuals with money in large brokerages such as Morgan Stanley.

Even Tiger had downplayed ambitions in the beginning. The target was less than half of the $12.7bn raised for its previous private equity fund in 2021, reflecting investor caution and falling valuations.

Tiger declined to comment. A person familiar with the fundraising effort said the group is “delighted” with the progress so far.

Tiger, which was founded by Chase Coleman in 2001, has emerged as one of the most prolific venture capital investors after backing hundreds of start-ups over the past decade. It has invested more than $20bn in private start-ups since the beginning of 2020, according to documents seen by the Financial Times.

Its biggest private holdings include stakes in TikTok parent company ByteDance, fast-fashion company Sheen and payments start-up Stripe.

During a pandemic-era boom in tech valuations, Tiger changed the venture world by offering founders large checks with few demands that private equity groups often make, such as representation on the board.

The enthusiasm of Tiger, as well as other large investors in private tech conglomerates such as SoftBank and Coatue, was a key factor in the sharp increase in valuations before the recent reversal.

But these investors are less active now, according to many of the founders they backed, adding to fears that start-ups will have to accept very low valuations if they want to raise cash again.

However, some of the bets made by Tiger’s earlier fund, known as PIP 15, are paying off.

According to a letter to investors in October, the fund is driven to make early-stage investments with an average check size of just $30mn and build a “meaningful ownership” position in OpenAI, the parent company of generative artificial intelligence start-up ChatGPT Did.

OpenAI recently raised $300 million, valuing it at $29 billion.