Tiger Global, a prominent crossover investment firm, has reportedly experienced a 20% paper loss on its $12.7 billion fund, net of management fees, as of December, according to The Information.
This news emerges shortly after The Wall Street Journal reported that Tiger Global had marked down the value of its investments across its venture capital funds by approximately 33%.
Tiger’s notable writedowns
Some of the most significant writedowns within the firm’s Private Investment Partners XV include its entire $38 million investment in the now-bankrupt FTX and FTX.US, as well as other crypto and Web3 investments, such as MoonPay, decentralized wireless network company Helium, and NFT startup Bored Ape Yacht Club.
One of the most substantial losses Tiger encountered was in its investment in the NFT marketplace OpenSea. The company invested $126.8 million in the startup in November 2021 and January 2022. By the end of last year, Tiger had marked that investment down to $30.2 million, marking a 76% drop.
Tiger Global has also faced a significant writedown on its largest holding, ByteDance. The firm invested $144.6 million in the China-based company in mid-2021 through secondary transactions.
By September last year, Tiger valued those investments at $100.8 million. In total, Tiger has invested more than $2 billion in ByteDance at various times and valuations.
The report reveals that around a quarter of the most recent fund’s investments are in the enterprise SaaS sector, with fintech and crypto being the next largest categories.
In addition to the dramatic value slashes, Tiger Global has reduced the target size for its latest venture fund to $5 billion, a significant decrease from the $6 billion target set last fall.
Implications for the Venture Capital landscape
The news of Tiger Global’s dramatic value reductions could potentially impact other venture capital firms and crossover investors, many of which may be facing similar portfolio adjustments.
Despite the downturn in the venture market, some firms continue to raise large funds, such as J.P. Morgan Growth Equity Partners, which recently closed its inaugural Growth Equity Fund at over $1 billion.
In light of these significant losses, Tiger Global has substantially decreased its investment activity over the past year. Crunchbase data shows that the firm made 158 deals in the first half of last year, while it has only made 21 so far this year.
This slowdown could be indicative of a broader trend within the venture capital space, as firms reassess their investment strategies in response to market fluctuations and increased uncertainty.
