From Pitchbook

By Marina Temkin
June 15, 2023

Tiger Global has told select secondary investors they can bid on any private company in its portfolio after a lead buyer didn’t emerge for a portfolio of assets packaged in a strip sale, according to several people with direct knowledge of the sale.

The pivot underscores the challenges asset managers are facing in finding buyers for their venture portfolios.

Tiger has been attempting to generate liquidity after its pandemic-era shopping spree for months. It initially tried to sell a percentage of its stakes in about 30 companies in the strip sale, according to one of the people.

The most efficient way of generating liquidity is to package attractive assets alongside ones with poor prospects and negotiate an average across-the-board price that would allow Tiger to sell stakes in many companies at once, including the ones that are hard to sell individually, said Joe Endoso, COO of Linqto, which offers a private securities investment platform. Linqto is interested in buying specific companies from Tiger but isn’t involved in the current bidding process.

Unlike the strip sale, many parties are expressing preliminary interest in Tiger’s individual assets.

Tiger has accumulated a vast portfolio of late-stage companies, backing 315 companies across 355 deals in 2021 alone, according to PitchBook data. It now holds stakes in some of the biggest names in VC, including Chime, Databricks, Brex and Cohere. Many of those investments came with hefty valuations: In 2021, Tiger led deals to back fintech Revolut at a $33 billion post-money valuation and self-driving car startup Nuro at an $8.6 billion valuation.

In a strip transaction, buyers become LPs in a portfolio of assets, and the GP retains some future upside in the remaining portion of these companies. In contrast, when buying stakes in specific companies, usually referred to as a secondary direct transaction, a buyer is added directly to the cap table of a single company.

Tiger isn’t the only investor that has been unsuccessful at selling a strip portfolio of late-stage VC assets, according to Ken Sawyer, managing director at Saints Capital, a VC firm that invests in direct stakes and portfolios.

“There are at least five portfolios with a [net asset value] of over $200 million. Many of these are brand name funds and brand name family offices.” Sawyer said. “There are no bids.”

Tiger’s willingness to sell its assets piecemeal suggests it faces more pressure for liquidity compared to other venture firms, said one secondary investor who has been having conversations with Evercore, Tiger’s adviser, about potentially buying direct stakes from the firm.

Tiger didn’t respond to a request for comment.

Selling direct secondary stakes may give Tiger a better chance for liquidity because the universe of potential buyers is larger than for the strip sale; the firm also may fetch a higher price on specific companies than on a portfolio of assets.

It couldn’t be determined whether Tiger has succeeded yet in selling any stakes in the companies.