Tiger Global Management just announced its latest venture fund targeting $2-3 billion - a massive comedown from the megafund era that signals the end of venture capital's most aggressive chapter. The firm that once led 212 startup rounds in a single year has made just nine new investments in 2024, marking a dramatic pivot to disciplined investing after years of heavy markdowns.
Tiger Global Management just threw in the towel on the megafund era. The hedge fund announced Monday it's launching Private Investment Partners 17, targeting between $2 billion and $3 billion - a stark retreat from the $6 billion it initially sought for its previous fund according to a letter to investors viewed by CNBC.
The numbers tell the story of venture capital's most dramatic pivot in years. Tiger went from leading 212 startup rounds in 2021 - the peak of its infamous "spray and pray" approach - to making just nine new private investments this year, according to Crunchbase data. That's not a slowdown; that's a full stop.
But here's the twist: Tiger's restraint might be paying off where it matters most. The firm's largest positions in its current fund are OpenAI and Waymo, both investments from 2021 that are now showing "massive gains," the letter states. Tiger first bought into OpenAI at a valuation under $16 billion - the AI giant is now worth over $150 billion after its latest funding round. Similarly, its Waymo stake from a $39 billion valuation looks prescient as the self-driving car company expands into new cities.
The firm's previous fund, PIP 16, tells the whole story of venture's recent turbulence. Initially targeting $6 billion, it ultimately closed at just $2.2 billion as limited partners grew skittish about the markdowns plaguing Tiger's portfolio. The new fund will be "similar in strategy, size and construction" to both PIP 16 and Tiger's earliest vintages, suggesting a return to the firm's pre-megafund roots.
This isn't just Tiger's story - it's the entire VC industry reckoning with the end of easy money. While Tiger was writing checks at breakneck speed in 2021, competitors like Sequoia and Andreessen Horowitz were equally aggressive. Now, with interest rates higher and exits scarce, the whole ecosystem is pulling back. Tiger's disciplined approach signals that even the most aggressive growth investors are admitting the party's over.
