Tiger Global Management is likely to invest in as many as five SaaS (software-as-a-service) companies in India in May including Locus, a logistics management software company, two people familiar with the development said.
This highlights Tiger’s renewed interest in the Indian startup ecosystem, albeit on the SaaS side this time.
The New York-based hedge fund, one of the early backers of India’s consumer internet sector, has invested in at least four SaaS companies since November after being quiet for several years. These investments include expense management software Fyle, facilities management software startup Facilio, connected workforce platform Innovapptive and mobile marketing startup Clevertap.
“They will evaluate SaaS bets at all stages—not just early but even series B and beyond," said one of the people cited above, both of whom spoke under condition of anonymity. “While a few of them are sub-$20 million cheques, there are 1-2 other SaaS companies Tiger Global is talking to for Series B and C financing."
This comes months after Tiger Global raised its latest fund Tiger Global Private Investment Partners XI of $3.75 billion -- which intends to focus on consumer internet, cloud computing, industry software and direct-to-consumer companies in India, China and the United States.
After closing its latest fund in October, Tiger Global started giving term sheets to several SaaS companies in India -- a departure from their theme in India almost a decade ago, when the hedge fund first backed online retailer Flipkart.
However, SaaS companies are not new to the Tiger Global portfolio. The hedge fund has made several SaaS investments in both, the US and China.
“They had slowed down their investments for several years in India, but now with their new fund, investments in India have picked up pace," said one of the persons familiar with Tiger Global’s strategy, requesting anonymity. “Now that there are high-quality SaaS companies in India, Tiger is bullish on them."
Globally, the fund has invested in companies such as China’s Udesk, which is an enterprise platform for intelligent customer service. It has also invested in US-based Green Bits, a company that makes point-of-sale software for cannabis retailers.
With the recent news of Tiger’s main representative for Indian investments, Lee Fixel, the country’s new investments including the likes of Clevertap which closed recently and the upcoming ones are now being headed by Scott Shleifer.
Tiger Global’s investment in Indian SaaS companies also highlights a larger trend of these enterprise software start-ups garnering international investor attention with more to come. There are approximately 8,000 SaaS startups in India with some of the tops ones being Tiger Global-backed Freshworks, according to data-tracking platform Tracxn.
“We will see more global investors back Indian SaaS companies as it is emerging as a strong theme over the last 8-1 2 months," said Karan Sharma, executive director for technology investment banking at Avendus Capital. “Unlike consumer internet companies, SaaS startups have a global addressable market and do not require high degrees of capital to scale."
Queries emailed to Tiger Global Management and Locus remained unanswered till press time.