Business Blog: Talking Tiger

Tiger closed its 16th fund at $2.2 billion, falling short of its $6 billion target.

April 3, 2024

Tiger Global may have raised a fund, but I wouldn't say it's roaring.

Tiger last week closed its 16th fund at $2.2 billion, a stark miss next to its $6 billion target. It's also a far cry from the $12.7 billion fund that Tiger closed in 2021.

To me, there's a natural question here—is this a macro problem or a Tiger-specific problem? The answer, of course, is that it's both. Tiger's smaller fund is both a sign of the times and reflective of how the firm's LP relationships may be shifting.

PitchBook analyst Kyle Stanford noted to Term Sheet via email that macro problems are, "a big factor in how LPs deploy capital…and when they assess their options, late-stage/growth venture investment likely isn't looking as appetizing as it was in the past," he said.

Suboptimal though it may be, there's absolutely precedent for a firm to miss fundraising targets, especially in tough markets. One case in point, Carlyle. In 2018 its $18.5 billion fund blasted past targets and the company touted it as the "largest in the firm's history." But by 2023 it was a very different story. On the firm's November earnings call, Carlyle CEO Harvey Schwartz told analysts outright: "Overall, we’ve not been pleased with our pace of fundraising, thus far, in 2023." In August, Carlyle closed its 8th flagship fund at $14.8 billion—far from the up to $27 billion reportedly targeted in 2021 under a previous CEO.

And the list goes on from there. In June, Insight Partners raised $2 billion for its 13th fund, a massive cut from the original $20 billion target. In July, it was reported that Coatue raised $331 million for its early-stage-focused fund, missing its target by more than 30%. Apollo, TPG, and TCV have all missed or slashed targets for their flagship funds within the last 12 months.

On the other hand, this is about Tiger too. The private equity business recently underwent a leadership change, with Scott Shleifer transitioning to an advisor role in November and founder Chase Coleman retaking the helm. Tiger actively decided to stop marketing the fund six months ago, opting to close it at this size and keep their focus on performance, a source familiar with the matter told Fortune. (Tiger declined to comment for this article.)

Tiger also likely has a rough 2021 valuation hangover. "They've been burned by the poor exit environment and the declining valuations," added PitchBook's Stanford. "Tiger deployed its previous fund at a very fast pace (that is probably an understatement). They were kind of left holding the bag."

"In 2021, Tiger backed the equivalent of nearly one startup every day—including weekends," my colleagues Jessica Mathews and Anne Sraders wrote in a September deep dive on the firm.

Of course, Tiger's not alone in its fast-paced, late-stage, go-go-go strategy—but it does for many exemplify that strategy. Tiger's miss here brings into relief the way in which a firm can echo the startups it invests in—especially in tough times, burn rate matters. In a limited liquidity environment, LPs have been increasingly concerned with how their GPs are pacing, and are encouraging slower deployment, one source who works closely with LPs told Term Sheet.

"LPs are looking for discipline in every sense of the word," the source said. "Not just 'what valuation are you investing at?' but 'what's your capital deployment pace?'"

Nevertheless, $2.2 billion remains $2.2 billion, which means Tiger's going to be out there with substantial dry powder.

"I think the market wants to jump on Tiger for not being able to raise another $10 billion fund, or even the $6 billion it set out to raise," said Stanford via email. But, he added, "At the very least, $2.2 billion is an impressive-sized venture fund."

See you tomorrow,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
Submit a deal for the Term Sheet newsletter here.

Joe Abrams curated the deals section of today’s newsletter.

VENTURE DEALS

- Seso, a San Francisco-based workforce management platform designed specifically for agriculture businesses, raised $26 million in Series B funding. BOND led the round and was joined by Index Ventures, NFX, SV Angel, and others.

- Modal, a San Francisco-based skills development platform for data and analytics professionals, raised $25 million in Series A funding. Left Lane Capital and Ensemble VC led the round and were joined by Signalfire and Learn Capital.

- OROS Labs, a Portland, Ore.-based developer of thermal insulation technology for clothing, raised $22 million in Series B funding. Airbus Ventures led the round and was joined by REI Co-op Path Ahead Ventures, Platinum Mile Ventures, Culper Ventures, Crumpton Ventures, Iron Gate Capital Advisors, and others.

- EarliTec Diagnostics, a Decatur, Ga.-based FDA-authorized tool designed to help doctors diagnose and assess autism and other early childhood vulnerabilities in children aged 16 months to 30 months, raised $21.5 million in Series B funding from Nexus NeuroTech Ventures and Venture Investors Health Funds.

- Datavolo, a Peoria, Ariz.-based multimodal data pipeline startup, raised $21 million in funding. General Catalyst led the round and was joined by Citi Ventures, Human Capital, Rob Bearden, and MVP Ventures.

- Read AI, a Seattle, Wash.-based provider of AI-generated meeting, email, and messaging summaries, raised $21 million in Series A funding. Goodwater Capital led the round and was joined by Madrona Venture Group.

- Permiso, a Alto Calif.-based threat detection company for cloud-based environments, raised $18.5 million in Series A funding. Altimeter Capital led the round and was joined by Point72 Ventures.

- Nucleai, a Chicago, Ill. and Tel Aviv, Israel-based AI-powered spatial biomarker company, raised $14 million in funding. M Ventures led the round and was joined by existing investors.

- TechGrid, a Charlotte, N.C.-based business platform for technology service providers, raised $9.2 million in Series A funding from Bellini Capital.

- Quadratic, a Boulder, Colo.-based data science spreadsheet platform, raised $5.6 million in seed funding. GV (Google Ventures) led the round and was joined by Catapult Ventures, Betaworks, The Fund Rockies, and angel investors.

- SiftHub, a San Francisco-based AI knowledge platform designed for sales and presales teams, raised $5.5 million in seed funding. Matrix Partners India and Blume Ventures led the round and were joined by Neon Fund and others.

- Home From College, a Los Angeles, Calif.-based platform designed to connect college students with professional opportunities, raised $5.4 million in seed funding. GV (Google Ventures) led the round and were joined by PEAK6 and Black Angel Group.

- Lockchain.ai, an Athens, Ga.-based blockchain risk management platform, raised $4.6 million in seed funding. Lerer Hippeau led the round and was joined by Arrington Capital, Valhalla Ventures, ARCA, and others.

- Delivery Collective, a San Francisco-based delivery platform designed to connect restaurants and other merchants to customers without the need for third-party middlemen, raised $3.8 million in funding. defy.vc and Bling Capital the round and was joined by Pathbreaker Ventures, GTM Fund, and 640Oxford Ventures.

- Lil Snack, a Los Angeles, Calif.-based developer of daily online games based on pop culture trends, raised $3.1 million in funding from Lerer Hippeau, Waverly Capital, A16Z GAMES SPEEDRUN, and Powerhouse Capital.

- Hapax, an Austin, Texas-based AI platform designed to deliver validated responses to complex financial services questions, raised $2.6 million in funding from RHS Investments.

- Supersimple, a Tallinn, Estonia-based AI-powered data analytics platform designed specifically for business-to-business software-as-a-service companies, raised $2.2 million in pre-seed funding. Tera Ventures led the round and was joined by Specialist VC, Tiny VC, and angel investors.

It's all about trust

Fortune CEO Alan Murray moderates a roundtable of leaders from Delta Air Lines, Hilton, Edward Jones, and Great Place to Work

Join us for a virtual session presented in partnership with UKG and Great Place To Work, where top CEOs will share their perspectives on how to build trust into your business and create a better workplace culture. Monday, April 8, 2024, 2:00 p.m. ET.

PRIVATE EQUITY

- Silver Lake agreed to take Endeavor Group Holdings (NYSE: EDR), a Beverly Hills, Calif.-based talent and entertainment agency, private for $13 billion.

- Elevation Labs, backed by Knox Lane, acquired Boomerang Labs, a Spring Park, Minn.-based provider of formulation and manufacturing services to beauty and personal care brands. Financial terms were not disclosed.

- Ethos Risk Services, a portfolio company of Carousel Capital, acquired Claims Eval, a Rocklin, Calif.-based provider of peer review and utilization review services. Financial terms were not disclosed.

- Outdoor Living Supply, a portfolio company of Trilantic North America, acquired Willow Creek Landscape Supply, a Rome, Ga.-based distributor of natural and manufactured stone, hardscapes, nursery, and other landscape products. Financial terms were not disclosed.

- Petershill at Goldman Sachs Management acquired a minority stake in Kennedy Lewis Investment Management, a New York City-based opportunistic credit manager. Financial terms were not disclosed.

- Sequoia Financial Group, backed by Valeas Capital Partners, acquired AltruVista, a Houston, Texas-based investment advisor and provider of financial planning and asset management services. Financial terms were not disclosed.

- Shermco Industries, backed by Gryphon Investors, acquired Power Test, a Harrisburg, N.C.-based electrical testing company. Financial terms were not disclosed.

- Yahoo, backed by Apollo Global Management, acquired Artifact, a San Francisco-based AI-powered news aggregation platform. Financial terms were not disclosed.

EXITS

- Clayton Dubilier & Rice agreed to acquire a majority stake in Presidio, a New York City-based IT services provider, from BC Partners. Financial terms were not disclosed.

- EQT Private Equity agreed to acquire Avetta, a Lehi, Utah.-based provider of supply chain risk management software, from Welsh, Carson, Anderson, & Stowe. Financial terms were not disclosed.

- KKR acquired a majority stake in SunFire, a Carlisle, Mass.-based provider of IT solutions and services to the Medicare market, from Stone Point Capital. Financial terms were not disclosed.

- Morgan Stanley Capital Partners acquired Resource Innovations, a Half Moon Bay, Calif.-based provider of advisory services, program management services and software to utility, government and corporate clients in the areas of energy efficiency and decarbonization, from BV Investment Partners. Financial terms were not disclosed.

OTHER

- SLB (NYSE: SLB) agreed to acquire ChampionX Corporation (NASDAQ: CHX), a The Woodlands, Texas-based provider of chemistry solutions, artificial lift systems, and other equipment and technology designed for oil and gas drilling, in an all-stock transaction valued at approximately $7.8 billion.

- Clearwater Analytics (NYSE: CWAN) agreed to acquire risk and performance analytics solutions from Wilshire Advisors, a Santa Monica, Calif.-based financial services firm. Financial terms were not disclosed.

IPOS

- UL Solutions, a Northbrook, Ill.-based provider of product testing and safety certification services, plans to raise up to $812 million in an offering of 28 million shares priced between $26 and $29 on the New York Stock Exchange. The company posted $2.7 billion in revenue for the year ending December 31, 2023.

- PACS Group, a Farmington, Utah-based provider of post-acute health care, plans to raise up to $420.2 million in an offering of 19.1 million shares priced between $20 and $22 on the New York Stock Exchange. The company posted $3.1 billion in revenue for the year ending December 31, 2023.

FUNDS + FUNDS OF FUNDS

- CF Private Equity, a Wilton, Conn.-based private equity firm, raised $1.1 billion for its fourth fund focused on investments in the secondaries market.

- Warren Equity Partners, a Jacksonville, Fla.-based private equity firm, raised $550 million across two funds focused on companies that provide mission critical products and services to the infrastructure and facility markets.

PEOPLE

- One Rock Capital Partners, a New York City, Los Angeles, Calif., and London, U.K.-based private equity firm, hired Jim Wiegmann as an operating partner. Formerly, he served as the CEO of OLM Food Solutions.