Chase Coleman’s Tiger Global Management has birthed many of its own cubs. But those cubs don’t always stick around.
Earlier this week, hedge fund and venture capital firm Tiger Global sent a letter to its investors, acknowledging the severe losses in its public portfolio and stating that, on the private side, the firm had decreased valuations every month this year.
“This is not a year in which the scoreboard will make us proud,” reads the letter, which was seen by Coins2Day.
But amid the performance and hiring update, the firm revealed yet another piece of challenging news: Its star software partner and most active investor on the venture capital side of the business, John Curtius, was leaving the firm.
Curtius, who joined Tiger in 2017 and now heads up its software investments, is planning to part ways with Tiger in June to launch a new fund, according to two people familiar with the matter, who spoke with Coins2Day on condition of anonymity. The new fund, dubbed Cedar Investment Management will back early-stage software companies in Series A to Series C rounds, according to one of the people. Four people close to the firm spoke with Coins2Day for this story. Both Curtius and a Tiger Global spokeswoman declined to comment. (The Information first reported Curtius’ upcoming departure.)
Curtius’ exit will be a difficult loss for the firm, particularly as it plans to go back to market for its next fund. Two people familiar with the firm’s fundraising efforts said Tiger soon plans to start fundraising from LPs (the Tiger spokeswoman declined to comment on the matter). Tiger Global’s flagship fund on the public side was down 50% the first half of this year, and the firm had cut or exited many of its public positions by mid-August. As per the letter, the private portfolio was down this last quarter, though it’s unclear by exactly how much.
“This continues to be a challenging market for our strategy, and we have tried to position the portfolio accordingly,” the letter reads, adding later: “We believe our portfolio positioning and exposures allow us to remain patient and play offense through this period, in which material daily market moves have been the norm and valuations in our focus areas have fallen.”
Software startups make up approximately 70% of Tiger’s private portfolio, according to a person familiar with the matter, and Curtius has become a name to note in the sector, landing Tiger on the term sheets of companies including Databricks, Snyk, Toast, Snowflake, SentinelOne, GitLab, and Kustomer, among others. He is known for moving at a fast clip, with PitchBook pegging Curtius as having led 111 of Tiger’s deals, compared to 54 for Scott Shleifer, who heads up Tiger’s private equity business, and 32 for Griffin Schroeder, who invests in both public and private consumer internet companies (Forbes puts Curtius’ investments at 250).
Just recently, Curtius had been handed new responsibilities at the firm, overseeing three of Tiger’s junior partners, according to two people with knowledge of the matter.
While Curtius’ departure is certainly one of note and his departure may likely spring concern among Tiger’s limited partners, it’s not the firm’s first rodeo. In 2019, there was Lee Fixel, who had been head of the firm’s private equity business prior to Schleifer, who left Tiger and went on to launch the VC firm Addition. Tiger partner Jason Schneider later joined him. Fixel’s departure preceded two years of rapid-fire venture activity at Tiger in which the firm positioned itself as the most active investor across the global private markets and incorporated early-stage investments as a core part of its strategy. Fixel’s absence perhaps made more room for investors like Shleifer and Curtius to make names for themselves.
A founder of a portfolio company backed by Curtius, who spoke with Coins2Day on condition of anonymity, says they don’t anticipate Curtius’ departure to have any kind of major impact on the firm, as Tiger’s team is still large and has strong processes in place.
Tiger has continued to build out its venture capital business, bringing on several new hires including a private equity associate from Hellman & Friedman, a growth equity investor at Apax Digital, and two private equity associates from Blackstone, according to the investor letter.
Tiger has proved to be a strong breeding ground for investors—both on the public and private side of the markets. But partners on the private side don’t have much autonomy while they’re still at the firm. Only Tiger Global founder Chase Coleman and Shleifer can sign off on deals, according to two people familiar with the matter.
This year aside, Tiger has had a strong track record. Early last year, Tiger Global had reportedly made an annualized 21% after fees in its two decades as a firm. But how much volatility can LPs really handle? Tiger’s next fundraise might tell us.
“We know we have a lot of work to do to earn back recent losses,” Tiger’s management team wrote in the letter. “We are committed to doing so and believe our team and the investment processes we have refined position us to do exactly that and more.”
Keeping up with Canva… While its valuation now lies somewhere in between the wide range of $26 and $40 billion, graphic design company Canva is the most valuable startup in the world that’s both female-founded and woman-led—by either measure. In Coins2Day’s latest cover story, my colleague Emma Hinchliffe delves into the startup’s past, present, and future, and how Melanie Perkins, the cofounder and CEO, has become one of the most visible leaders in Australia. You can read the full story here and go through Coins2Day‘s annual list of Most Powerful Women in business, published this week, here.
See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: [email protected]
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Jackson Fordyce curated the deals section of today’s newsletter.
VENTURE DEALS
- onX, a Missoula, Mont.-based outdoor digital navigation company, raised $87.4 million in Series B funding. Summit Partners led the round and was joined by investors including Madison Valley Partners and others.
- Tines, a Dublin, Ireland-based no-code automation platform for security teams, raised $55 million of Series B extension funding led by Felicis.
- IriusRisk, a Huesca, Spain-based threat modeling automation cybersecurity company, raised $29 million in Series B funding. Paladin Capital led the round and was joined by investors including BrightPixel Capital, SwanLaab Venture Factory, 360 Capital, and Inveready.
- Katalyst, a Las Vegas-based workout and exercise platform, raised $26 million in Series A funding. Stripes led the round and was joined by investors including Incisive Ventures, Unlock Venture Partners, and other angels.
- Railsr, a London-based embedded finance platform, raised $26 million in Series C funding. Anthos Capital led the round and was joined by investors including Ventura, Outrun Ventures, CreditEase, and Moneta.
- Partake Foods, a New York-based natural food brand, raised $11.5 million in Series B funding. Cleveland Ave’s CAST US fund, Fearless Fund, Supply Change Capital, Kaya Ventures, Marcy Venture Partners, CircleUp Growth Partners, Black Star Fund, FF2032, and Black Capital invested in the round.
- QorusDocs, a Bellevue, Wash.-based proposal management software company, raised $10 million in additional funding led by WestRiver Group.
- Everstores, a Berlin-based investment company for D2C brands, raised €8 million ($8 million) in seed funding. Earlybird Venture Capital and Viola Credit co-led the round and were joined by Picus Capital and other angels.
- Spexi, a Vancouver, Canada-based drone-based aerial data platform, raised $5.5 million in seed funding. Blockchange Ventures led the round and was joined by investors including Protocol Labs, Alliance DAO, FJ Labs, Dapper Labs, CyLon Ventures, Fort Capital, and others.
- Halo.Car, a Las Vegas-based driverless electric car rental provider, raised $5 million in seed funding. At One Ventures led the round and was joined by investors including T-Mobile Ventures, Earthshot Ventures, and Boost VC.
- Lasso Labs, a San Mateo, Calif.-based NFT utility platform, raised $4.2 million in funding. Electric Capital led the round, and was joined by investors including Ethereal Ventures, OpenSea, Village Global, Page One Ventures, and other angels.
- Tidal Cyber, a Clifton, Va.-based cybersecurity company, raised $4 million in a seed+ funding. Ultratech Capital Partners led the round and was joined by investors including Access Ventures, Task Force X Fund, Virginia Innovation Partners, First In, BlueWing, Saas Ventures, and others.
PRIVATE EQUITY
- AE Industrial Partners agreed to acquire a majority stake in York Space Systems, a Denver-based small satellites, satellite components, and turnkey mission operations provider. Funds and accounts managed by BlackRock Private Equity Partners also agreed to invest. Financial terms were not disclosed.
- Allied Industrial Partners acquired a majority stake in Wall Recycling, a Raleigh, N.C.-based solid waste hauling, disposal, and recycling services provider for municipal, commercial, and industrial waste generators. Financial terms were not disclosed.
- Axcel, backed by Alpine Investors, acquired EduMind, a Dublin, Ohio-based education and training provider for professional exam preparation. Financial terms were not disclosed.
- Aztec Software, backed by NexPhase Capital, acquired iGrad, a San Diego-based financial literacy platform. Financial terms were not disclosed.
- Deltech Holdings, a SK Capital Partners portfolio company, acquired StanChem, an East Berlin, Conn.-based emulsion polymers and protective coatings provider. Financial terms were not disclosed.
- Fenix Parts, a portfolio company of Stellex Capital Management, acquired Reno Auto Parts, a Hillsboro, Ohio-based automotive recycler. Financial terms were not disclosed.
- Healthcare Linen Services Group, a portfolio company of York Private Equity, acquired Reino Linen Service, a Brownstown and Gibsonburg, Mich.-based health care linen solutions provider. Financial terms were not disclosed.
- Huron Capital and TriStruX acquired Hess Broadband, a Warwick, Pa.-based fiber optic splicing and specialty construction services provider. Financial terms were not disclosed.
- Mercer Global Advisors acquired Goldstein Munger + Associates, a San Ramon, Calif.-based wealth management firm. Financial terms were not disclosed.
- StoneRidge Insurance Brokers, a CIVC Partners portfolio company, acquired Deerborne Insurance, a Toronto-based personal and commercial insurance company.
- Susquehanna Growth Equity acquired a minority stake in ZenQMS, an Ardmore, Pa.-based electronic quality-management software provider. Financial terms were not disclosed.
EXITS
- Levine Leichtman Capital Partners acquired AGDATA, a Charlotte, N.C.-based workflow and data solutions provider within the agribusiness and animal health sectors, from Vista Equity Partners. Financial terms were not disclosed.
- Waypoint Capital and Gearbox Capital acquired Greenshades Software, a Jacksonville, Fla.-based payroll, payroll tax, human capital management information, and software solutions provider, from SFW Capital Partners. Per terms of the deal, SFW will retain a minority stake in the company. Financial terms were not disclosed.
- Wind Point Partners acquired FreshEdge, an Indianapolis-based fresh foods distributor, from Rotunda Capital Partners. Financial terms were not disclosed.
OTHER
- Duolingo acquired Gunner, a Detroit-based animation and illustration studio. Financial terms were not disclosed.
PEOPLE
- Ara Partners, a Boston, Dublin, and Houston-based private equity firm, hired Teresa O’Flynn as partner and co-lead of the firm’s infrastructure strategy. The firm also hired Gearóid Maher as principal. Formerly, O’Flynn was with BlackRock and Maher was with Legal & General Capital.
- Cathay Capital, a Paris-based private equity firm, hired Jean-Marc Prunet as partner. Formerly, he was with Rothschild & Co., Eurazeo, and Fondations Capital.
- Clayton, Dubilier & Rice, a London and New York-based private equity firm, hired Gordon Smith as an operating advisor. Formerly, he was with JPMorgan Chase.
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