The past decade and a half has been attributed to the recent roar of an investment firm to put Indian startups on the global map, transforming local young companies into unicorns at speeds never seen before in the world’s second-largest Internet market.
Tiger Global has written – or is in the final stages of writing – more than 25 checks, from a few million dollars to over $ 100 million, this year alone. It has so far unveiled 10 of its investments, with the rest in the pipeline for the coming weeks and months.
The New York-headquartered firm, which recently closed a $ 6.7 billion fund, led investment last week in social network Sharewatch, business messaging platform Gupshup, and investment app Groww, and participated in the fintech app CRED round, All these startups gained a lot. The unicorn sought after the situation.
(A report in India estimated that Tiger Global plans to invest $ 3 billion of its new funds in Indian startups. ClearTips considers the $ 3 billion figure that is off the mark.)
Tiger Global also invested in InfraMarket and InnovaSure, two other Indian startups that went sideways earlier this year. (India has distributed 10 balls this year, seven last year and six in 2019.)
Tiger Global is currently in the advanced stages of bringing back the eponymous firm PharmEasy, which has turned into a unicorn last week, fintech firm Cleartax (possibly a $ 1 billion valuation), crypto exchange Coinswitch, insurer Plum, B2B marketplace Moglix (over $ 1 billion valuation), social firms Kutumb and Ku (valued at over $ 100 million, according to Captable), healthtech firm Pristine Care, and Reshammandi, according to people familiar with the matter.
No other investment firm has written checks of this magnitude to Indian firms this year, and the frenzy has reached a point where dozens of startup founders are scrambling to get acquainted with Tiger Global partners.
Tiger Global’s confidence in young Indian firms is not new. Investments in Flipkart in 2009 and Ola in 2012 showed risk-hungry opportunities and levels of interest for the US firm to operate in India, at a time when both firms were struggling to raise money from some Indian investors.
Under his former partner Lee Fixel, the investment firm supported a number of young firms including online grocer growers, logistics startup delivery, fashion e-commerce Myntra, news aggregator InHorts, electric scooter manufacturer Ather Energy, music streaming service Saavn, Fintech Resporare, And web creators. Tvf.
A handful of startup founders, on condition of anonymity, recalled their investments from Tiger Global, which they said concluded within two to three weeks of the first call from the investment firm.
But Fixel slowed down its investment momentum when it departed in 2019, and focused on supporting Saira startups for nearly a year.
Things have changed in recent quarters and Tiger Global has become more aggressive than ever, a venture capitalist who has invested in some startups with Tiger Global, able to speak openly in anonymity.
The firm is now exploring investment opportunities in a months-old startup. For example, Reshammandi is still in its ideal phase.
The investor stated above that another example of Tiger Global’s new strategy has been reported to Infra.market. It wrote its first check to Infra.market in 2019, when the B2B startup was just two years old.
“Tiger then wanted to see if the startup could grow up and convince other investors to bring them back. So in December, Infra.Market raised money to the value of about $ 250 million. Two months later, Tiger Global closed the new round at a $ 1 billion valuation, ”the investor said.
Great for startups, while it is a challenge for some investors, another investor said.
When Tiger Global values a startup to a level that the majority of the industry cannot match, and cannot lead to subsequent rounds, there are very few firms that can invest in the following financing rounds, investors he said.
On private forums and in recent weeks, the clubhouse, many investors have cautioned that the optimism recently shared by some investors may challenge materiality. “Tiger Global has traditionally been very optimistic in India every two to three years. The problem is that when it is not optimistic, we should pick up the tab, ”said one investor.
“Under Scott Schleifer [MD at Tiger Global and pictured above]Investors may be different. Looking at Tiger Global’s recent activities over the next few years, things certainly look consistent – and India is an important global playground for the firm.
India, which is the world’s third-largest startup hub, is set to produce 100 unicorns in the coming years, Credit Suisse analysts wrote in a report for customers last month. “The corporate landscape of India has been undergoing a paradigm shift in the last two decades due to the remarkable confluence of funding, regulatory and business environment in the country. An unprecedented pace of new-company formation and innovation across a wide range of sectors means an increase in the number of highly-valued, as yet unlisted companies, ”he wrote.
“Growth in highly valued companies has been enabled by a range of factors: (1) The natural lack of risk capital in an economy with low per capita wealth has been addressed by a boom in (mostly foreign) private equity: these flows There are more transactions from the public market in each year of the last decade; (2) Teledensity and increased smartphone and Internet penetration. As of 2005, less than 15% of Indians had a phone, now 85%; 700 mn-plus people now have Internet access due to cheap data and falling smartphone prices (now 40% penetration). “
“(3) Changes in the deep-rooted physical infrastructure: Almost all settlements are now connected to all-weather roads, compared to only half in 2000, and in 2001 all households are now electrified by only 54%; (4) Financial innovation is booming, courtesy of the world-leading “India Stack”, which has innovative applications such as universal bank account access, UPI based on mobile and biometric-ID (Aadhaar), more data availability. Help for ; And (5) the development of ecosystems in many regions that now provide a competitive advantage versus global peers; For example technology (4.5 mn IT professionals) and pharma / biotech (many Indian firms can now buy US $ 200–300 mn annual R&D). “