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The Tiger Global Management megafund that made more than 200 investments during the peak of the pandemic-era startup boom was still in the red at the end of 2024, thanks to write-downs on a majority of its investments.

But the spike in valuations of OpenAI and other artificial intelligence investments is softening the blow for the $12.7 billion fund, famous for both its size and the speed with which it has backed startups.

The Takeaway

• Tiger’s PIP 15 fund had an annualized return of negative 12% at end 2024

• The fund lost money on the distressed sale of Lacework

• Tiger continues to buy shares of OpenAI, the fund’s most valuable investment

The fund, launched in October 2021, had an annualized return, net of fees, of negative 12% at the end of last year, according to documents reviewed by The Information. That’s an improvement from the fourth quarter of 2023, when it was negative 20%, a person familiar with the matter said.

Still, the fund’s recent performance has lagged the broader market and funds operated by its peers. The S&P 500’s annualized returns, net of fees and including dividends, generated an annualized return of 12% between October 2021 and the end of 2024. As of the third quarter, the Tiger fund’s negative internal rate of return of 14% put it in the bottom decile of global funds launched the same year, according to PitchBook, which hasn’t released its benchmarks for the fourth quarter.

Tiger’s older and newer venture capital funds have performed far better. Its PIP 10, launched in late 2015, had an annualized return, net of fees, of 29%, as of the fourth quarter, according to a person familiar with the matter. That puts it in the top quartile of funds for that year, according to PitchBook.

In April 2024, Tiger Global raised $2.2 billion for its PIP 16 fund, after sharply reducing the original target of $6 billion. PIP 16’s investments are worth more than the capital it has invested in those companies, according to a person familiar with the matter.

Tiger Global has raised more than $41 billion for its 15 VC funds since 2003, according to PitchBook. Together, they have generated a net internal rate of return of 17% and distributed around $31 billion in cash to their investors, according to the person. Meanwhile, the hedge fund’s flagship fund, which holds public stocks, rose 2.5% in the first quarter, a contrast with the nearly 5% drop in the S&P 500.

There is some precedence for big funds to recover after rough starts. SoftBank’s $100 billion Vision Fund, launched in 2017, had been deep in the red in past years thanks to WeWork and other unsuccessful investments. But it has been posting gains in recent quarters, thanks to higher valuations of private startups like ByteDance and of public stocks.

Tiger Global was among the most aggressive tech investors during the pandemic’s low-interest-rate period. In 2020 and early 2021, before raising its $12.7 billion fund, it invested in dozens of startups. The New York hedge fund moved quickly, writing founders’ checks sometimes in as little as three days from initial conversations to signed term sheets, and doubled down on favorite investments using secondary shares.

The buying spree almost immediately soured once tech stocks crashed in late 2021.

The supersize flagship fund, called PIP 15, bet heavily on fintech, e-commerce and crypto, areas hit particularly hard when interest rates spiked. Within a year of raising the fund in October 2021, Tiger had invested nearly $11 billion of the money raised, according to documents shown to investors.

While some of those investments have started to recover, the fund has continued to slash the value for others.

It has written down its stake in nonfungible token marketplace startup OpenSea, which it backed in 2021 and 2022, to $7.5 million at the end of last year, from $127 million.

The fund also wrote down its investment in Level to $2 million from $79.4 million. The benefits startup abruptly shut down in January, The Information first reported.

Investments in some AI startups partially offset those losses. The fund’s biggest position and most valuable investment is OpenAI. The fund made a $125 million investment in 2021 when OpenAI was valued at $15.7 billion. Tiger’s PIP 15 then bought a combined $80 million of shares through a secondary sale that valued the ChatGPT maker at $86 billion and through a fundraise last year that put a $157 billion valuation on it.

Tiger’s PIP 15 stake in OpenAI was valued at $650 million at year-end, which means on paper it is worth more than three times the capital it invested in the company, the documents show. It’s likely worth even more today, thanks to a SoftBank-led round that values OpenAI at $300 billion including the investment.

Tiger is participating in the latest round, and it has also backed OpenAI through other funds, according to the person.

The fund’s returns have benefited from the rising value of its investment in Worldcoin, a cryptocurrency startup co-founded by OpenAI CEO and co-founder Sam Altman, and its associated token. After investing $15 million in Worldcoin in May 2022, the fund wrote down the position to $6 million at the end of 2022, during the depths of the crypto sell-off. But by the end of last year, the stake was worth $114 million on paper, according to the documents shown to investors.

And Tiger marked up its position in humanoid robotics company 1X Technologies, which OpenAI has also invested in. The PIP 15 fund invested $9 million into the company between 2022 and last year. Tiger now estimates the stake is worth nearly $32 million.

The firm also took some money off the table in its AI bets. By late last year, PIP 15 had sold 30% of its stake in Cohere, a competitor to OpenAI. The value of the remaining shares have gone up since Cohere raised more capital in July at a $5.5 billion valuation. The fund invested $62.7 million in the company in 2021 and values the remaining stake at $163.5 million.

The performance of the fund this year may improve thanks to some recent transactions. In March, ServiceNow said it planned to buy AI startup Moveworks for $2.85 billion. Tiger’s PIP 15 fund put $83 million into the startup, a stake that should be worth $100.7 million based on that sales price.

The Tiger megafund also invested $77.4 million in Flock Safety, including leading a round in the surveillance startup at a $3.5 billion valuation in 2022. In March, Flock Safety raised money at a $7.5 billion valuation, with Tiger Global participating in the round.

PIP 15 may also eventually return some capital from its investment in Revolut, a U.K.-based fintech, which is reportedly considering going public.

In recent quarters, the fund has started to sell more of its positions, thanks to a pickup in mergers. For the most part, the sales haven’t translated to big gains. In December, Nvidia acquired Run:ai, an Israel-based AI software startup the PIP 15 fund backed in 2022. The fund realized proceeds of nearly $36 million, or 1.1 times the cost of its investment.

PIP 15 lost money from several distressed sales, including cybersecurity firm Lacework’s sale to Fortinet in August 2024. It also lost $6 million on its $55 million investment in Octo AI, which Nvidia acquired in September.

The fund also wrote down most of its $55 million investment in Humane, which developed a wearable AI device and sold to HP in February at a 86% discount to its last private valuation.

PIP 15’s most successful exit has been Cider Security. The fund’s stake tripled in value when Palo Alto Networks bought the Israeli cybersecurity startup in late 2022.