Tiger Global Management LLC is a well known name in the Indian Startup industry circuit for being one of its biggest investors. But, unfortunately there is a bad news for the New York based investment firm and the Indian startup industry.
According to reports, Tiger Global Managment LLC has ended up losing a staggering billion dollars in its hedge fund, as its venture capital investments are under scanner in the Indian subcontinent.
The hedge fund had to face such consequences partly because of the substantial declines in its biggest investments—Chinese e-commerce company JD.com Inc., Netflix Inc. and Amazon.com Inc.- in the first in the first three months of 2016.
According to SEC filings, the investment firm had bought millions of shares in these companies for over a billion dollars during sometime last year.
The investment firm holds stakes in Flipkart Ltd., one of the largest Indian ecommerce startup, through its venture capital fund, and in Amazon.com, one of Flipkart's foreign competitors, through its hedge fund. But, unfortunately, none of these have helped in providing an armour of protection to Tiger Global because all these tech startups are currently under watch for their valuations.
The lower risk tolerance level of some institutional investors like mutual funds etc. can be seen as an important part of the issue. Many of these investors have started on a process to write down their investments in tech companies as they're concerned about them being overvalued.
Recently, according to SEC filings, for the quarter ended in December, a Morgan Stanley fund wrote down its stakes in Flipkart by a huge 23 percent.
According to industry experts, this markdown trend could spread like wild fire in the Indian startup industry and have major impact on other major Indian startups. If this happens, large investors like Tiger Global would have to face pressure.
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