Tiger Global launches new fund as it takes more disciplined approach

Tiger Global Management on Monday announced the launch of its latest venture capital fund, Private Investment Partners 17, according to a letter to investors viewed by CNBC.

Tiger is targeting a $2.2 billion raise for the fund, according to a person familiar with the firm’s strategy who declined to be named to discuss internal matters.

The hedge fund wrote that it expects PIP 17 to be similar in “strategy, size and structure” to its initial products and its most recent PIP 16, which targeted $6 billion but ultimately closed at $2.2 billion.

The largest positions in PIP 16 are OpenAI and Waymo, which helped the performance rebound. In his meeting with investors, Tiger said that PIP 16 has increased by 33% since the beginning of the year and PIP 15 has increased by 16%.

Compared to mega funds of the early 2020s, the latest increase target signals a turn towards a more disciplined strategy for Tiger Global.

The firm was one of the biggest forces in the startup ecosystem over the last half-decade, but has seen heavy discounting and slower distribution over the past few years.

He scored 212 runs in 2021, the heyday of his “spray and pray” approach, according to Crunchbase data. This year, only nine new private investments were made.

Tiger first invested in OpenAI in 2021 at a valuation of just under $16 billion, and in Waymo the same year at $39 billion.

The Tiger Global letter and audio of the investor call obtained by CNBC also point to some concerns about the potential for a bubble in artificial intelligence.

“[V]The praise is high and, in our view, sometimes not supported by the company’s fundamentals, the firm wrote in its letter. “We also recognize the importance of approaching a technological change of this magnitude with some humility.”

The strategy laid out by founder Chase Coleman is to aggressively prune and strengthen the biggest winners.

Tiger announced that it generated over $1 billion in revenue from PIP 15 by selling more than 85 companies.

This money can now be converted into follow-on investments for companies seen as winners.

Some of the names Tiger said he will focus on include digital banking startup Revolut and TikTok parent company ByteDance.

Other companies Tiger focused on in the investor presentation include police tech company Flock Safety, EV company Harbinger, e-commerce startup Rokt, shipping company Cargomatic, and stablecoin startup BVNK.