Tiger Global Not Fulfilling Its Promise To Fund Another $1 Billion VC Firm

Key Points:

• Tiger Global does not fulfill its promise to sponsor VC firms.
• They cite a deteriorating market and opposition from the company’s supporters or limited partners.
• The company also previously reduced its $38 million funding in FTX to zero.

Tiger Global does not fulfill its promise to sponsor VC firms. Funding was initially committed to $1 billion, but investments were reduced or canceled due to market deterioration.

A year ago, leaders at Tiger Global Management committed $1 billion of their capital to back dozens of venture funds that invest in the youngest startups. It’s a powerful new attempt to increase the hedge fund’s access to promising companies. However, when the business environment in the startup market deteriorated, investors expressed that they would reduce their previous investments.

People familiar with the matter said that when Tiger Global’s VC returns turned hostile, the company’s partners provided the VCs with plenty of reasons to back out of their commitments investment, including deteriorating economic conditions and due diligence requirements. According to three of those people, Tiger employees often cited objections from either the company’s supporters or limited partners as a reason.

A venture capital fund manager said that he received a verbal commitment from Tiger Global but could not contact his partners for the next four months, and it ultimately did not invest.

Forbes also reported that Tiger Global broke its commitment to invest in the early-stage venture capital fund Banana Capital. It was previously reported that Tiger Global invested $38 million in FTX with the help of Bain and other companies due to due diligence, and the company deducted this investment.

Tiger Global has now reduced its $38 million stake in FTX to zero, while it pays Bain over $100 million yearly to research private companies. A representative for company declined to comment, and Bain Capital did not immediately respond to a request for comment. Now the company also wants to raise $6 billion for its next venture fund.

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