Tiger Global, the venture capital powerhouse that fueled the 2020-2021 bull market, is reportedly raising a new $2.2 billion fund, Private Investment Partners 17 (PIP 17). This latest fundraising effort signals a significant shift towards a more cautious and "humble" investment strategy, particularly concerning the burgeoning AI sector, despite its previous fund's recent success in the space.
The firm sent a letter to potential limited partners, a copy of which was obtained by CNBC, outlining its plans for PIP 17. The communication promises a more measured approach compared to the aggressive tactics employed during the 2021 bull market frenzy.
The firm's aggressive "spray and pray" approach, which saw it deploy capital at an unprecedented pace during the 2021 tech boom, defined its PIP 15 fund. This massive $12.7 billion vehicle invested in 315 startups that year alone, often at peak valuations and sparking intense bidding wars among VCs, as TechCrunch reported and PitchBook data confirmed. However, this strategy faced a harsh reality when rising interest rates triggered a venture market crash in 2022-2023. Many startups subsequently struggled to justify their inflated 2021 valuations, with numerous companies eventually shuttering.
The downturn also prompted significant internal changes at Tiger Global. Prolific investor John Curtius left to start his own fund, and Scott Shleifer, the firm's chief of private equity investments, transitioned to an advisory role, while founder Chase Coleman assumed a more direct leadership position.
Despite these challenges, Tiger Global's more recent PIP 16 fund, which also raised $2.2 billion in 2024, has seen remarkable success, as Bloomberg reported. This fund's strong performance is largely attributed to its strategic investments in high-profile AI companies such as OpenAI, Waymo, and Databricks. These "blockbuster" AI holdings have driven PIP 16's paper gains by an impressive 33% to date, according to the letter.
However, the firm's communication regarding PIP 17 underscores a newfound prudence. The letter explicitly warns that AI investments could be risky, requiring "humility" because "valuations are elevated and, in our view, sometimes unsupported by company fundamentals." This suggests that even as Tiger Global seeks to capitalize on further AI opportunities, it acknowledges the potential for an AI market bubble and aims to avoid contributing to unrealistic valuations. Tiger Global could not be immediately reached for comment.
