Source: Tiger Global told investors earlier this month that it will no longer focus on large, late-stage startups preparing to go public
Berber Jin / The Information : Tweets: @jessicalessin , @jessicalessin , @berber_jin1 , @carnage4life , @cityofthetown , @refsrc , @lesamitchell , and @amir Tweets: Jessica Lessin / @jessicalessin : Wow. The crossovers say they aren't crossing over. “Tiger Global Management told its investors in a webinar earlier this month that it would no longer focus on backing large, late-stage startups preparing to go public.” https://www.theinformation.com/ ... @berber_jin1 Jessica Lessin / @jessicalessin : One of the best things about covering private and public investing is how rational it generally is. When it doesn't seem so, there is basically more to the picture that isn't understood. Case in point: https://www.theinformation.com/ ... Berber Jin / @berber_jin1 : tiger says it is stepping down from late-stage, pre-IPO investments to focus on series a and b deals a further death knell for traditional early-stage funds https://www.theinformation.com/ ... @carnage4life : Tiger Global concedes what we all already know, late stage unicorns are over valued. This is the natural consequence of most tech IPOs being underwater last year, even before the recent market crash. Illiquid & underwater is going to be a bad place to be for some tech employees. https://twitter.com/... Tom Dotan / @cityofthetown : Poor returns in the widening gyre The crossover funds will no longer cross over; Things fall apart; the center cannot hold https://www.theinformation.com/ ... Manish Singh / @refsrc : Tiger Global no longer focused on backing large, late-stage startups preparing to go public, per Information. Others including D1 Capital and smaller firms such as Octahedron also have slowed down the pace of new late-stage private investments. https://www.theinformation.com/ ... Lesa Mitchell / @lesamitchell : Well there you go. We are all back to the top of funnel https://twitter.com/... Amir Efrati / @amir : New: Tiger, D1, other hedge funds moving away from late stage private-tech deals because now they seem a lot more expensive than they used to...@berber_jin1 https://www.theinformation.com/ ...
Context & Ripple Effects
This is the pivot point in Tiger Global's arc from hyperactive crossover fund to early-stage specialist. It comes off a year in which Tiger was the top US startup investor with 361 deals at the market's crest, and it precedes the retreat the rest of the coverage documents: a planned two-quarter investment slowdown, then a fund target cut from $6B to $5B against the prior fund's $12.7B.
First-order effects
- Late-stage startups preparing IPOs lose their most aggressive marginal buyer just as the public-market window narrows, while Series A and B founders gain a new source of Tiger capital that previously went upstream.
Second-order effects
- Fellow crossovers D1 Capital and Octahedron have already slowed new late-stage investments, so Tiger's exit removes the price-setting bidder from a segment where Tiger had been setting clearing prices — pressuring valuations for companies still holding out, consistent with Tiger refusing hundreds of bids for its own private assets as too low.
Third-order effects
- If the pattern holds, the 2020–21 crossover model — hedge-fund-scale megafunds buying pre-IPO stakes at public multiples — unwinds structurally: LPs reprice late-stage private risk after Tiger's $23B portfolio markdown, and the industry re-segregates into stage-specialist funds like the early-stage vehicles Tiger's partners are backing with $1B of their own cash.
The trend: Crossover capital is retreating from late-stage private markets back toward early-stage discipline, ending the era of hedge funds as the default exit liquidity for pre-IPO startups.