Is Tiger Global buying the Valley?
DD readers might not be able to pick out Tiger Global Management founder Chase Coleman from a crowd of financial titans.
But Silicon Valley insiders have certainly taken note of the $50bn group’s torrid pace of investment this year.
In January and February, the fund invested in one start-up about every two days, nearly doubling its pace of investment from the same period last year.
Coatue Management, a frequent co-investor with Tiger Global, has also upped its pace by about half.
Venture capitalists told DD’s Miles Kruppa that both companies are leading a flurry of dealmaking that has helped push already toppy Silicon Valley valuations even higher.
Investors were on track through to the end of February to plough more than $460bn into start-ups this year, according to PitchBook data. That would easily set a new high in PitchBook’s record books, though the data doesn’t go as far back as the 2000 dotcom bubble.
“There’s a tremendous amount of competition,” Arun Mathew, a partner at the venture capital group Accel, told DD. “There’s just so much capital in the market at all stages.”
One venture capitalist said that more active groups had resorted to preparing short slide decks, rather than fully-fledged investment memos, to underwrite their positions.
Investors don’t seem ready to call a bubble in venture capital, at least compared to the scepticism brewing over blank-cheque companies, which have given billion-dollar valuations to moonshot ideas that had been rejected by more traditional backers.
But it seems fair to say that, these days, the “fear of missing out” is driving venture dealmaking just as much as risk-return calculations.