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Tiger Global’s Lee Fixel Aiming At India Again 

Sep 14, 2018 by Avanish Tiwary
Tiger Global’s Lee Fixel Aiming At India Again 

New York-based Tiger Global, the hedge fund that went on an investment spree in Indian startups only to give it a break for two long years, has started putting money in the country once again.

In 2018, the company has already invested USD 360 million in six companies such as TVF, Chargebee and Grofers, among others.

The company started to hunt for new opportunities since November last year after it decided to exit from its two biggest investments in India—Ola and Flipkart.

Tiger Global has reportedly raked USD 3 billion after orchestrating the USD 16 billion Flipkart-Walmart deal—the biggest purchase of an e-commerce company globally. Reportedly, it is also looking at partially exiting from its investment in the taxi-hailing company Ola by selling 10-12% of its stake to Japan’s SoftBank Group for USD 400-500 million. Lee Fixel who looks at Tiger Global’s India investments has already stepped down from Ola’s board in November last year.

With its exit from Flipkart and potentially from Ola too, people in the industry said it’s the right time for Tiger Global to hunt again.

“Many people including us, spent the last two years consolidating our past investments. Now when Tiger’s old investments have stabilised, it is most certainly looking for new deals,” said Sandeep Murthy, Partner, Lightbox Ventures.

According to a Tracxn data, while Tiger Global participated in 55 rounds of investment in 2014 and 2015 combined, it placed bets in only 11 rounds for the next two consecutive years. The Tracxn data shows Tiger Global invested USD 2,651 million in 2015, which plummeted to USD 260 million in 2016 and USD 110 million the year after.

It wasn’t just in India that Tiger Global had put its investments on a hiatus. A report by CB Insights shows Tiger Global invested USD 6,329 million globally in 2016 and 2017 combined, while in 2015 alone it invested an odd USD 8,061 million.

“There was a lot of worry about how Flipkart would fair in the market with Amazon as a direct competitor. Fixel just wanted to close those investments before placing new bets,” said a founder in the food tech space, who did not wish to be named.

Courtesy: CBInsights

However, unlike its earlier investments that ranged anywhere between USD 3-10 million on an average, it wants to write bigger cheques this time in companies that have proven their business model and are at a growing stage. The investors and founders, who The Passage talked to, said even though Fixel is sector-agnostic, he will certainly look at companies that provide faster growth rate compared to his previous experiences and invest anywhere between USD 30-100 million in each of its new portfolio companies.

The food-tech entrepreneur cited above said Tiger Global was hitting multiple darts on the board, out of which some have performed really well while some totally missed the mark. “It did not do well with a few exits such as Caratlane and Little, that it was really excited for when it invested,” the entrepreneur said.

Courtesy: CBInsights

In 2013, with the sudden influx of funds in the Indian e-commerce sector, companies spent a lot on customer acquisition for at least two years.

“From 2014 to 2015, people were investing heavily on acquiring customers and were giving heavy discounts, free delivery and lucrative cash-back offers.

Newspapers ran full-page advertisements of nothing, but discounts from e-commerce companies. All of that was fuelled by excess capital allowing for a faux belief that we must grow this way,” said Murthy.

With the increase in losses reported year after year by the e-commerce industry leaders such as Flipkart, Paytm, Housing, etc., investors started to question their unit-economics. “Investors were getting a little cautious and they wanted founders to re-think their strategy with regards to customer acquisition,” the entrepreneur said.

During 2016 and 2017 Indian e-commerce industry witnessed drastic downfall in the number and size of investments.

It was also the time when the industry went through a course correction as the growth of consumer internet companies wasn’t as fast as investors expected it would be.

“Now, because capital wasn’t flowing as freely as it was earlier, companies had to focus on cost-effective customer acquisition techniques. Growth might have slowed, but companies were also burning less money,” said Murthy.

Vaibhav Khandelwal, co-founder of last-mile delivery startup Shadowfax said, “During 2015-16 the companies started to realise the importance of unit economics and now they aware of how to keep it at check.”

Murthy said founders have become more rational in the past two years and now they realise they can’t keep on with the rampant discounts and cash-backs.

“The industry together agreed that they need to figure out to work differently and offer a better proposition to customers,” he said.

How to bell the cat?

With its past experiences of investing in Indian consumer internet companies, Tiger Global would be changing its strategy and be a little cautious when it comes to writing cheques to early-stage companies.

“Going forward they will be happy to write bigger cheques in companies that have gained some traction and customers. There will be more of Series B investments that we would see from the Tiger Global camp,” said the entrepreneur cited above.

Although all the people The Passage talked to, said Fixel is looking at good opportunities in mid and growth stage companies, but “If there is a really good opportunity Tiger Global will not shy away from investing in an early stage company again,” said one of the people mentioned earlier.

Khandelwal also believes Tiger Global would focus more on growth companies as compared to the early stage bets that it had put in earlier. He said since India already has a few growth stage companies that have scaled and matured as a market, it will be too lucrative an opportunity for Tiger Global to miss on them. According to Khandelwal, sectors such as fintech, grocery and edu-tech have a lot of companies that are looking for that push to reach the next level of growth.

“With the exit like Flipkart, the investor confidence has moved back into the market. An exit at such a good scale cheers the overall sentiment of the investors,” Khandelwal said.

Avanish Tiwary

Avanish Tiwary is a Bangalore-based tech journalist. He focuses on emerging Indian startups and unicorns. He can be reached at

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