In the first two parts of the series, we deep-dived into various facets of Tiger Global and SoftBank, from tracing their origins to dissecting their playbooks. In the third and final part of this series, we’ll explore the geographic concentration of their investments, year-wise investments, which rounds they invest in, who they invest with, their top bets, and finish off by comparing their differences.
Which countries did they invest in?
Tiger Global has made 841 investments in 38 countries, which amounts to an average of 22 investments per country but with a median of just 3. Meaning the average is skewed by a large number of investments in a handful of countries. The US alone accounted for almost half of all investments.
The top five countries accounted for around 84% of the investments, while the top ten accounted for 91% of the investments. The remaining 28 countries had less than ten investments each.
Europe accounted for 6% of the total number of investments, with the UK and Germany leading the list. Asian countries accounted for 32% of the investments, with India and China leading the way. The median number of investments for Europe was two while for Asia it was five.
SoftBank has made 320 investments in 30 countries, slightly less than 11 investments per country. But again, the median number of investments is much lesser, just 2. In a similar fashion, the top five countries account for 84% of the investments, while the top ten account for 91% of the investments. The remaining 20 countries have around 1-2 investments each.
Around 13% of the investments were in Europe, with the UK and Germany in the first and second positions, respectively. Asia accounted for 28% of the investments, led by India and China. The median number of investments for Europe was two while for Asia it was three.
Both Tiger and SoftBank made more investments in India than in China, but Tiger was more aggressive, having made 246% more investments in India than in China, while SoftBank made only 9% more investments in India.
How have they invested over the years?
Tiger’s 841 investments have been spread out across 21 years, but 2021 alone accounted for 43% of its investments. Tiger started making double-digit investments in 2010 and steadily increased its pace until 2015 post which there was a steep drop. One of the reasons for the drop could be Tiger’s horrible Q1 2016 performance, whereby the hedge fund’s value plunged by 22%, driven by a drop in its three largest stock bets- Amazon, Netflix, and Chinese e-commerce company JD.com. The hedge fund again picked up pace after three years and almost held the pace even in 2020 before it went berserk in 2021. In 2021, Tiger increased its investments by a whopping 342% YoY largely due to the low-interest rate environment, aka cheap money.
SoftBank has made 320 investments between 2011 and 2021. There was a rapid increase in investments in 2017, the year the Vision Fund I was launched. The number of investments increased by 39% YoY in 2018 before experiencing a 10% drop in 2019, which may be because of the WeWork fiasco. SoftBank later increased its pace, and just like Tiger, it too went berserk in 2021, registering a 310% YoY increase in investments.
Which rounds did they focus on?
Around 52% of Tiger’s investments have been in early-stage rounds (Series A, B & C), while 33% are in late-stage rounds (Series D to J). Seed-stage investments make up a mere 1.67%. Tiger is relatively new to the seed stage, having made 50% of the seed investments in 2021. It has also made 25 private equity investments, which amounts to around 3% of the total. Indian e-commerce company Flipkart’s US$3.6B raise in Jul 2021 and self-driving car company Waymo’s US$2.5B round in Jun 2021 are the largest PE rounds that it has participated in.
Compared to Tiger, SoftBank has made fewer investments in early-stage rounds (37%) and has focused more on late-stage rounds (43%). SoftBank’s seed investments are even lower, coming in at just 0.63%. Private equity investments amount to 8% of the total. SoftBank’s top PE round is the same as Tiger’s, Flipkart’s US$3.6B raise in Jul 2021, followed by South Korean e-commerce company Coupang’s US$2B round in Nov 2018.
Who do they invest with?
To find out the investors that most often invest with Tiger, we analysed 3600+ investors that participated in 841 rounds, and the results are in. American venture capital firm Accel leads the list, having made 70 investments together. Accel’s prominent rounds include Flipkart’s US$1B Series G in Jun 2014 and cloud communications platform MessageBird’s US$800M Series C in Apr 2021. New York-based crossover fund Coatue ranks second with 52 investments. Coatue’s prominent rounds include fusion tech startup Commonwealth Fusion’s US$1.8B Series B in Dec 2021 and data and AI startup Databricks’ US$1.6B Series H in Aug 2021. Taken together, Sequoia Capital and Sequoia Capital India have made 77 investments along with Tiger.
To determine SoftBank’s investment buddies, we analysed 1400+ investors across 320 rounds. Coincidentally, SoftBank’s top investment buddy is Tiger, having made 16 investments together. Tiger’s prominent rounds include Chinese edtech startup Zuoyebang’s US$1.6B Series E round in Dec 2020 and UK-based fintech startup Revolut’s US$800M Series E in Jul 2021. Coming in at a close second place are Sequoia Capital and Sequoia Capital China, with 15 investments each. Sequoia Capital’s top round is the massive US$7.7B raised by Uber in Dec 2017. One of the prominent rounds of Sequoia Capital China is proptech company KE Holdings’ US$2.4B Series D in Mar 2020.
What are their top bets?
Top bets are defined as those companies that have raised more than US$1B from Tiger (or SoftBank) and other participating investors across various rounds. Tiger has 18 such companies in its portfolio, and the median funding raised by these companies is US$1.4B, and the average is US$1.9B.
California-based Lacework is a unified cloud security platform that automates cloud security at scale. The platform automates every aspect of security, from configuration assessment and behaviour monitoring to anomaly and threat detection. Tiger has participated in Lacework’s US$1.3B Series D round in Nov 2021 and US$525M Series C round in Jan 2021. Massachusetts, US-based Commonwealth Fusion is an energy research company aiming to commercialise fusion energy. The company, which was spun out of MIT’s Plasma Science and Fusion Centre, has a dedicated team of experts working on delivering clean, limitless fusion power to the world.
Founded in 2014, Missfresh is a Beijing-based on-demand retail business offering fresh produce and fast-moving consumer goods. Tiger has participated in three of Missfresh’s rounds- US$230M Series C round in Sep 2017, US$450M Series D round in Sep 2018, and US$495M Series E round in Jul 2020.
Tiger has also invested in SoftBank’s US$1B PE round in Jul 2018.
SoftBank’s top bets comprise a portfolio of 37 companies spread across 11 countries, with the median, and average funding raised being US$1.4B and US$2.1B, respectively. SoftBank’s largest bet has been Uber, in which it participated in two funding rounds, a US$1.25B PE round and a US$7.7B secondary market round, both in Dec 2017. It also participated in the US$1B corporate round of Uber Advanced Technologies Group in Apr 2019; the company was later sold to Aurora Innovation in Dec 2020.
Taking a closer look at SoftBank’s top bets reveals the industries that it has focused on:
- Food Delivery: Philadelphia, US-based Gopuff, California-based DoorDash, and Colombia-based Rappi.
- Real Estate: New York-based WeWork, Shanghai-based WeWork China, New York-based Compass, Haryana, India-based Oyo, Beijing-based Ziroom, and Beijing-based Ke.com.
- Logistics: Jiangsu, China-based ManBang Group (aka Full Truck Alliance) and California-based Flexport.
- Autonomous Vehicles: Uber Advanced Technologies Group, California-based Nuro, and California-based Cruise.
- E-Commerce: Bengaluru, India-based Flipkart, Indonesia-based Tokopedia, Seoul-based Coupang, UK-based The Hut Group, and Istanbul-based Trendyol.
- Healthcare: Massachusetts, US-based Devoted Health, New York-based Roivant Sciences, Shanghai-based Ping An Healthcare Management, and Jiangsu, China-based Abogen Biosciences.
How are they different?
|Focus Areas||Global internet, software, consumer, and fintech||AI leaders in consumer, edtech, enterprise, fintech, frontier tech, health tech, logistics, proptech, and transportation|
Funding Rounds (based on the number of investments)
|Early-stage rounds (Series A to C)||Late-stage rounds (Series D to J)|
|Backed By||American General Life Insurance Company, retirement plans for JPMorgan and 3M, foundations like the Rockefeller, Tiger’s own employees||Vision Fund 1: Public Investment Fund (PIF), Mubadala, Qualcomm, Apple, and Foxconn|
Vision Fund 2: Self-funded
|Investment Management||Hands-off approach||Hands-on approach (takes board seats)|
Despite following radically different strategies, diversifying across industries and countries, and pumping billions of dollars into bleeding-edge startups, the de facto rulers of venture capital have suffered billion-dollar losses and are sitting on shaky thrones. Both Tiger and SoftBank are currently battling an endless wave of negative macro factors ranging from war and inflation to supply chain shocks, recurring Covid outbreaks and a looming recession. Does Tiger still have the confidence of its LPs? How will the possible US delisting of Alibaba affect SoftBank? These are just some of the questions that remain unanswered. It’ll be interesting to see how these giants come out of this mess (hopefully). Tiger Global and SoftBank have truly reshaped venture capital and have introduced a radically different model to the world. And if they do survive the crisis, they’ll continue disrupting the industry.
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