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May 27, 2015

What does Lee Fixel of Tiger Global know about India that local VCs don't?

Lee Fixel, Partner & Head of Venture Capital

Riding on its early and aggressive bets in the E-Commerce segment, New York-based Tiger Global Management currently enjoys a “lion’s share” of the mindshare in the Indian Venture Capital ecosystem. At the Venture Intelligence APEX’15 PE/VC Summit in March, one VC speaker candidly admitted: If there is one foreign investor who knows the Indian Internet & Mobile landscape better than us locals, it’s him” (meaning Lee Fixel, the head of Tiger’s VC operations). A mid-market Private Equity investor wistfully remarked: “While we will never be good at it as the Tigers of the world, we really need to figure out this E-Commerce thing - if we are to produce supernormal returns for our investors”.

Sharad Sharma, Angel Investor & Co-Founder iSPIRIT writes in the Economic Times: "Unfortunately, due to just one individual - Lee Fixel of Tiger Global - Flipkart has gone from being a poster child to being the single biggest risk to the technology ecosystem." 

Given how it has - almost single handedly - re-ignited excitement in the Indian Venture Capital segment, Tiger is clearly the investor everyone wants to follow. Here therefore is some essential reading on what Tiger has been up to in the country between April 2007 and April 2015:

What is Tiger Global’s most successful investment in India?

Flipkart is clearly Tiger’s biggest bet in India. Despite being an early investor in the company, Tiger has continued to participate in the mega rounds Flipkart raised in 2014-15 at ballooning valuations. From an exit standpoint however, local search firm Justdial stands out. In what was its first investment in India, Tiger had invested INR 74 crore in April 2007 in the then privately held Justdial (and followed it up with an additional INR 27 crore in July 2009). In four tranches - between Dec-14 and May-15 - Tiger completed exited Justdial realizing INR 1,331 crore or over 13 times its investment (of INR 101 crore).

Wow! Was Tiger the first PE/VC investor in Justdial?
Nope. SAIF Partners had picked up a 19.5% stake for about INR 55 Cr in Oct-06 (and had co-invested smaller amounts - with Tiger and Sequoia Capital India - in later rounds).

Have Tiger and SAIF partnered in other successful deals?
In Sep-07, Tiger Global joined SAIF and other existing investors in online travel firm MakeMyTrip. (SAIF had originally invested in the company in 2005.) MakeMyTrip went public on the Nasdaq in 2010, resulting in strong returns (read: upwards of 10x) for its investors and triggering, what many consider, the Second Internet Gold Rush in India.
In May 2015, Tiger invested in “tea cafe” chain Chaayos and electric bikes maker Ather Energy. Has Tiger made other investments in sectors outside of Internet & Mobile? Historically, yes: National Stock Exchange (in Oct-09), power producer Asian Genco (Aug-07); test preparation company T.I.M.E (Jan-08) and vocational education company IIJT (Aug-08) What’s the status of Tiger’s older non-tech investments? Tiger sold its stake in IIJT to HR Services firm Teamlease in 2010 - at a significant loss. The rest of the companies are un-exited. Oops. But isn’t NSE a good bet? In Oct 2013, Private Equity investors in the exchange - including Tiger - were reported to have sent a note to the NSE management - via a law firm - demanding the exchange go public and/or issue more dividends. The “request”, according to another report, however had not seemed to have found much purchase
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Which Indian VC firms has Tiger partnered with the most and the least?
In the taxi segment, Tiger and Accel chose to part ways - in 2012, Tiger went with Ola, while Accel backed TaxiForSure (TFS) - only to see the companies come together in 2015 (as Ola acquired TFS)!

Kalaari Capital (the first VC investor in Flipkart rival Snapdeal.com) and IDG Ventures India, which had partnered with Tiger at Myntra in  2011, and Inventus Capital (which had invested in Policybazaar in Apr-13) stand out among active VC firms with least portfolio companies in common with Tiger.

Does Tiger depend on other VC funds for its deal flow?

Mostly Tiger has been a co-investor or a follow-on investor. The rare exceptions include e-jeweler Caratlane.com (starting in Feb-11), Ola’s first round (in Apr-12)  and online gaming firm Rummycircle (where Tiger had partnered an individual investor in Apr-11).

How did the Tiger investment in Caratlane.com happen?

Speaking at a conference, Caratlane.com founder Mithun Sacheti said the investor had reached out to him over LinkedIn! Between Feb-11 and Jan-15, the company has raised four rounds of capital - all from Tiger.  And not for want of trying (to get other investors interested). According to Sacheti, the maturity and understanding that Tiger has - from having seen online businesses evolve in other parts of the world - is lacking in purely India-based investors.

Does Lee Fixel actually joins the board of Tiger’s Indian portfolio companies?

Yes. He personally sits on the boards of the following half-a-dozen companies: Ola, Caratlane.com, Commonfloor, Hike, Culturealley and Relevant E-Solutions.

Is there anyone from Tiger on the ground in India?



Managing Director Kalyan Krishnamurthy, formerly based out of Singapore, is reported to have recently shifted to Bangalore to oversee Tiger’s growing India portfolio. He sits on the boards of Caratlane.com and Grofers. A former eBay Asia executive, Kalyan had also served as an interim CFO at Flipkart (on deputation from Tiger) in 2013-14.

How much has Tiger actually invested in India?

Tiger has invested an estimated $1.3 Billion in India-based companies over the last eight years. The number of companies it has invested in has crossed 40 - with a dozen new companies being added in the first five months of 2015.
Where is all this India data about Tiger Global coming from?
From the Venture Intelligence PE/VC Deal database - India’s longest serving and most reliable source of data on PE/VC transactions. Including the really really juicy stuff like valuations and return multiples.  If you already subscribe, just login, click on the “Directory” tab and search for “Tiger”. Or just click this direct link.

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Where can I get more free background about Tiger? Naughty you! Head over to the Venture Intelligence Blog Post “Worried about Tiger Cubs & other Hedge Funds in Indian StartUp territory? Now, start thinking about the Grand Cubs.” But make sure to head to the Venture Intelligence PE/VC database for the real stuff - like what kind of valuations is Tiger offering companies for the Series A deals it’s doing in 2015, etc.

Venture Intelligence is the leading provider of data and analysis on Private Company Financials, Transactions (private equity, venture capital and M&A) & their Valuations in India. Click Here to Sign Up for the FREE Weekly Edition of the Deal Digest: India's First & Most Exhaustive Transactions Newsletter.