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Jan 14, 2017, 11.46 AM | Source: Moneycontrol.com

Why Tiger Global is tightening noose on its Indian investments

Even as New York-based investment firm took a bold step to replace founders from the CEO position in its biggest Indian bet Flipkart, here is a look at how Tiger Global's other startups are faring in India.

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Why Tiger Global is tightening noose on its Indian investments

Even as New York-based investment firm took a bold step to replace founders from the CEO position in its biggest Indian bet Flipkart, here is a look at how Tiger Global's other startups are faring in India.

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Priyanka Sahay

Moneycontrol Bureau

Tiger Global-backed Flipkart this week announced Kalyan Krishnamurthy, who was a key executive of the investment firm as its new CEO.

The move made it clear that US-based Tiger Global Management wants to take no chance with one of its most important investments in India. It is taking every measure to tighten control especially, at a time when Flipkart is facing cut throat competition from its American rival Amazon which has readied billions of dollars to capture India market.

Multiple devaluation in a year by global hedge funds also made Tiger Global take this decision even as it signals a strong move to other portfolio companies.

Besides Flipkart, it has invested across 48 other companies in the country in the last one decade, according to startups data tracker Tracxn.

Tiger Global’s assets in India are looked over by its 37-year-old Partner Lee Fixel. It was Fixel who met Bansals in 2009 before investing Flipkart, even as US-based Accel Partners had already taken an early position in the company.

Tiger Global’s History in India

Flipkart was not the first investment for Tiger Global in India.

In India, Local search engine Just Dial was the first Indian firm to raise funding from Tiger Global. Tiger Global had invested about Rs 77 crore in JustDial in 2007.

The company went on with a successful initial public offering in 2013 and Tiger Global received a successful exit.

Lee Fixel is known to move at an incredibly fast pace with investments whether it was LetsBuy’s acquisition by Flipkart or Jabong acquisition by Myntra which was completed within 72 hours. 

However, not all firms that bagged money from the global investment fund have a rosy picture to share.

Budget hotel accommodation aggregator Zo Rooms had to suspend its operations even as the firm was in conversation with larger rival Softbank-funded Oyo for an acquisition. While the company has completely suspended its operations, there is no official clarity on the status of the deal, which went into a deadlock due to valuation issues.

A look at the top 6 key investments by Tiger Global in India besides India and how they are faring:

1) Ola Cabs

The Bangalore based firm is locked in a tough battle with US-headquartered rival Uber, the domestic taxi hailing firm is struggling to raise a fresh round of funding. It is reported to be in talks to raise $600 million. It last raised $57.3 million from US-based investment management firm Vanguard Group Inc in December 2015. On the other hand after exiting from the China market, the $60 billion firm Uber has sharpened its focus completely on the Indian market with fresh investments.

Total Funding: USD 1.357 billion

2) Quikr

The local classifieds firm’s losses widened to Rs 534 crore for March 2016 against Rs 446 crore during the previous year. However the company that raised almost USD 20 million from Brand Capital, the private treaty arm of media firm Bennett, Coleman and Co. Ltd (BCCL), has strengthened its multiple verticals including real estate, jobs and beauty. The company has of late been on an acquisition spree. It acquired home rental startup Grabhouse and beauty services marketplaces Stayglad, among others in 2016. Tiger Global consolidated its portfolio by merging its real estate classifieds firm CommonFloor in 2015 with Quikr for USD 200 million in a cash and stock deal.

Total Funding: USD 369.55 million

3) Shopclues

The Gurgaon-based e-commerce firm joined the unicorn club last year with a fresh round of funding from sovereign wealth fund GIC Pte with participation from existing investors including Tiger Global and Nexus Venture Partners among others. The amount wasn't disclosed but the round got the firm a claimed valuation of USD 1.1 billion. This was a big example of investor confidence shown to a firm whose survival was uncertain till late 2015. The funding gave a fresh lease of life to Tiger’s another e-commerce bet.

Total Funding: USD 231.25 million

4) Hike Messenger

Messaging app Hike too entered the unicorn ring with a valuation exceeding USD 1 billion, last year. It however remained subject to criticism with regards to its monetisation model. The company is the only unicorn that hasn't even started to make money. The company faces tough competition from global chat applications such as Whatsapp and Snapchat. Tiger Global’s investment in Hike was upped on books as Tencent has come as a participating investor.

Total Funding: USD 261 million

5) Grofers

Early 2016 was definitely not a very happening year for the online grocery firm. However, demonetisation gave it a fresh lease of life as people started ordering and paying online. From job cuts to revoking jobs offers to suspending operations across multiple cities, Grofers saw it all in 2016. Grofers was not the only grocery startup that faced trouble, competitor Peppertap decided to shut shop in April too. Working out unit economics became the biggest challenge for the online grocery delivery firm. The company is now working to improve the same by combining deliveries and sending it across through vans instead of bikes. It has also curbed its express delivery system massively by passing it mostly to the third party merchants. The company has two of the biggest startup backers in Tiger Global and SoftBank.

Total Funding: USD 166.5 million

6) Freshdesk

The enterprise software maker last raised USD 55 million in Series F round by Sequoia Capital among other investors. The California-based firm claims to have over 80,000 customers. According to a Magic Quadrant research report for CRM vendors, published by Gartner, while Freshdesk's solution is good at the basics, it requires scaling up. The bet on the enterprise software firm by Tiger Global looks optimistic as the company has a steady revenue flow unmarred by troubles in economy.

Total Funding: USD 150.5 million

Other major investments by Tiger Global in India: NewsInShorts, ChargeBee, LimeRoad, Roposo, LocalOye, Delhivery, Chaayos, PolicyBazaar, Ather Energy.


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