Tiger Global invests $300 million so far this year in Indian firms

Tiger Global Management, arguably one of the most prolific global investors in Indian startups, has started to ramp up its presence once again with investments of around $300 million so far this year. It has backed 13 companies, including a $90-million round in agri-tech startup Ninjacart and a $60 million infusion in B2B industrial goods marketplace Moglix.

The latest deals signify a marked change in Tiger’s investment strategy, with a growing focus on the financial services and B2B sectors, according to industry watchers.

The New York-based fund had virtually stopped funding Indian startups since a $30 million investment in shared accommodation platform NestAway in 2016.

Tiger’s other new investments this year include Zenoti, which provides software to spas and salons; Locus, offering transport automation in the logistics space; Fyle, which provides expense management software to enterprises; OkCredit, a cloud-based accounting software firm for micro-merchants; Open, which provides banking services to businesses; Sirion Labs, which helps large enterprises manage outsourcing and procurement services, besides providing contract management software; and CleverTap, a mobile analytics for marketing firm. It has also invested in Ola Electric, the electric vehicle arm of ride-hailing firm Ola.

Tiger Global has also pumped in money in existing portfolio firms such as NestAway, Grofers and payments startup Razorpay. All the investments cater to businesses, rather than consumers, driven by the thesis that B2B and software is a more mature market with predictable growth outcomes.

Last August, Tiger made its first and biggest exit in India with a whopping $2.5 billion in profits when Walmart bought over existing investors of e-commerce marketplace Flipkart in a deal valued at $16 billion. Since then, the firm has seen the departure of its head honcho, Lee Fixel, known for his aggressive deal-making.

Fixel spearheaded an early investment in Flipkart in 2009, following it up with another billion dollars over the years.

After Fixel announced his departure in March, Tiger’s investments are headed by Scott Shliefer. According to Forbes, some of Shleifer’s best investments have come from China, where the company exited its $200 million investment in e-commerce platform JD.com with $5 billion. Shleifer also led Tiger’s investments in the firm’s return to India after nearly three years.

“SaaS (software-as-a-service) is one of the most mature sectors right now. There are several success stories such as Zoom, PagerDuty, Atlassian, Slack, etc. The metrics of growth and success are very well understood unlike some B2C sectors, and existing old categories being disrupted by nimbler startups,” said Anand Jain, co-founder, CleverTap, a marketing analytics firm where Sequoia Capital and Tiger had participated in a $26 million round in April.

For portfolio companies, Tiger’s investing experience and success also matter. “They bring a commitment to capital, but also access to global markets. They have an extremely long horizon for their investments, hold several public and private positions in SaaS. So, they’re not just backing private, but also public companies,” Jain added.

Tiger’s strategy has also been to invest in companies already backed by globally well-known venture capital funds such as Sequoia, Accel and Lightspeed. A dozen of the 13 investments made this year comprise one of these funds as an early backer. This move also mitigates risk to some extent, considering that a well-known investor on board helps steer the company in the right direction.

Its investments also follow the creation of large B2B and SaaS startups in India for the first time. “B2B and SaaS companies are the flavour of the season with successful scaling up such as Freshworks, Udaan, MuSigma, etc. They have identified a way to success and it is easier to predict the business,” said Anil Joshi, managing partner, Unicorn India Ventures.

Tiger led a $30 million round last month in Open Financial Technologies, which is backed by Unicorn India Ventures. Open offers a business account in partnership with banks, which helps businesses automate and run their finances.