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$65 billion hedge fund Tiger Global has been on a startup investing spree this year, averaging more than one venture-style investment per business day in 2021, Insider reported.
As companies choose to stay private for longer periods of time and the number of public companies in the market has declined, hedge funds like Tiger Global and D1 Capital Partners are turning to startups as a source of differentiated returns. Tiger Global has won deals away from some of the most prominent venture capital firms, participating in 110 startup financings this year already compared to its next-fastest competitors in startup funding Andreessen Horowitz (101 investments) and Accel (87 investments), according to Pitchbook's estimates.
And its strategy is largely paying off. The firm, headed by founder Chase Coleman, saw a $1 billion windfall on its 2014 investment in Chinese ride-hailing startup Didi Global after the company went public on June 30th, Bloomberg reported.
Another Tiger-backed startup, Uruguayan payment company DLocal, made a successful public debut on June 2nd at $21 per share, well above its intended pricing range of $16-18 per share.
Website creation platform Squarespace, meanwhile, went public through a direct listing on May 19th, pricing below its expected range and with shares plummeting 13% on opening day. Tiger had participated in a $300 million funding round in March with various other investors.
According to reports in The Information and the Financial Times, Tiger Global is known in the venture world for approaching startups before they begin fundraising and offering to pay high premiums. The hedge fund could now be set to realize more gains from its strategy as some of its key portfolio companies look to go public.
We outlined the companies Tiger Global has funded in 2021 that have either filed or discussed plans to go public this year below.
Filed:
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Blend Labs
Blend Labs, a mortgage-tech company, made the IPO prospectus it filed with the Securities and Exchange Commission public on June 21. The company is preliminarily aiming to raise $100 million in the offering, to be underwritten by Goldman Sachs, Allen & Co, and Wells Fargo Securities, though the company has not yet shared its planned number of shares and price range.
The digital lending platform has raised $665 million to date, including $300 million in Series G funding it closed from Tiger Global and Coatue on January 13, according to Crunchbase. The round, which valued the company at $3.3 billion, nearly doubled its valuation from its last funding round five months prior. Tiger Global owns about 6% of the company before the IPO, according to the prospectus.
Zomato
One of Tiger Global's many bets in India is slated to go public in July on the Indian stock exchanges NSE and BSE, per the Economic Times. Indian food delivery group Zomato has filed for a $1.1 billion initial public offering, which would make Zomato's IPO the biggest in India so far this year, per Bloomberg.
The company, which counts China's Ant Financial as a large shareholder, was last valued at $5.4 billion after a $250 million funding round co-led by Tiger Global and Kora in February. Tiger Global also led its previous $160 million funding round in September 2020 alongside Temasek Holdings. Kotak Investment Banking, Morgan Stanley, Credit Suisse Group AG, BofA Securities, and Citigroup Inc. will serve as arrangers on the IPO.
Expected:
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Dingdong Maicai
Chinese fresh-food grocery app Dingdong Maicai, plans to go public in an offering underwritten by Morgan Stanley, BofA Securities, and Credit Suisse. The company plans to raise $94.4 million in its US IPO this year, a sum it revised downward in a June 28th filing by over 70% from its original target of $357 million.
Dingdoing Maicai last raised $30 million in a so-called "D-plus" funding round led by SoftBank on May 11, said its advisor, Cygnus Equity. The round came on the heels of a $700 million Series D financing led by DST Global and Coatue, with participation from existing investors including Tiger Global and Sequoia Capital.
Dreamsports
Dreamsports, the parent company of Indian fantasy sports platform Dream11, is reportedly in early talks with investment banks for a US public listing by early 2022, per the Economic Times in April. The 13-year-old startup is considering merging with a SPAC for its public market debut.
It raised $400 million at a $5 billion valuation in March 2021 led by TCV, D1 Capital Partners, and Falcon Edge, with participation from existing investors including Tiger Global and TPG Growth. Dream11's valuation after the round brought it to the league of India's most valued unicorns like OYO ($9 billion) and Zomato ($5 billion).
Gupshup
Indian customer engagement messaging platform Gupshup raised $100 million from Tiger Global on April 8 at a $1.4 billion valuation for the company. The round will be followed by a second close "with significant additional funds raised from more investors,"per the press release.
The funding news comes after Gupshup CEO Beerud Sheth told MergerMarket in November 2020 that it might initiate an IPO process over the next 12 months or pursue a deal with a private equity buyer.
Patreon
Patreon, a platform facilitating payments from fans to support content creators, is considering going public as soon as this year, a source familiar with the matter told The Information. The startup has met with both banks and SPACs, though according to the source, a SPAC merger is not its preferred route to the public markets.
The company's valuation tripled to $4 billion after its last funding round in April, in which it raised $155 million led by new investor Tiger Global with participation from existing investors including Wellington Management and Lone Pine Capital.
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