Brief Overview- This article talks about Tiger Global Management, one of the most active investors in billion-dollar startups (unicorns) and how they silently picked up the pace of investments with more than 65 billion dollars invested actively and established themselves amongst the big traditional Venture Capital firms.
If you are an entrepreneur, an investor or even just a simple follower of the world of finance, names like Sequoia, Accel, Nexus Ventures ring a bell. Does Tiger Global? For most, no. Tiger Global Management is an investment firm based out of America that mostly focuses on internet, financial technology and consumer driven startups. With just 20 years since its incorporation and hardly over a 100 employees, this relatively unheard of firm has somehow easily placed itself against the well-established investment industry giants.
As of Q1 2021, the Tiger has over $79 billion in Assets Under Management and they really have been picking up their pace of investments. Compared to the 69 firms they invested in throughout 2020, in the first half of 2021 itself, they have invested in 118 companies.
This Tiger has shown its preference in taste as well, with the stripes mostly going after unicorns. There are 126 unicorns that are in the Tigers portfolio and the number is further going up with record breaking deal closing times. With swift, stealth and aggressive moves, the Tiger has already outpaced traditional venture investors in terms of both number of investments and amount of investments.
This leads us to the biggest question of all- How has this Tiger been so successful with its hunt?!
Tiger Global is more aggressive, fast moving, modern and generous than its industry competitors.
Writing bigger checks-
When you have nearly $80 billion of assets and some of the hottest startups in your portfolio, raising funds doesn’t seem as tough a task. Recently, the Tiger got its 13th funding round of $6.6 billion which adds to their huge purse. With big capital and big returns (estimated at $10.6 billion in 2020), writing bigger checks doesn’t seem to be a problem. The Tiger isn’t shy to spend for what it feels worth and this generosity is well reciprocated by entrepreneurs.
Tiger Global closes deals in record times. One key strategy used here is that lower returns are still better than money lying idle. Instead of just holding investor money for years till the deal cracks, Tiger invests it. They further move faster than its rivals to get the hottest companies in the market.
Less hassle and due-diligence-
They say a tiger hardly repeats the same mistakes. Tiger Global too knows that there is no bigger loss than missing out on a good deal. The firm doesn’t get stuck up on valuation and number issues when there is a growth prospect. They don’t waste time in driving the price down; instead it generously gives out more money.
While this economic term sounds fancy, in the easiest of words, it means that success is more likely without intervention and supervision. Tiger Global too just does a two way transaction, invest money to take returns. They don’t want to teach the business how to operate, they don’t need voting rights, a seat at the table and most importantly they don’t interfere in day to day operations. Businessmen too would usually want someone to just give them money and let them spend it however they like right? Pretty comfortable!
With a sound strategy of letting businessmen run their business, not being stuck up on paying as little as possible and investing money faster instead of letting it lie around, in under two decades since incorporation, the Tiger is now the King of the Jungle!