Tiger Global’s VC Arm Borrows Billions and Lender JPMorgan Calls In More Banks
Tiger’s outstanding NAV loans rose to about $4 billion in 2021
The firm’s publicly traded stakes have plunged since November
Excerpt
Originally published March 18, 2022 at 10:00am EST
Chase Coleman’s Tiger Global Management made more than 300 venture-capital investments last year, including more than one a day in the fourth quarter, as assets at its VC arm tripled to about $65 billion.
Booming equity markets and high-flying Chinese tech stocks -- many ofwhich cratered this year -- were major contributors to that breakneckgrowth. But it was also fueled by a tool that venture firms tend to avoid: debt
In particular, Tiger relied on a form of borrowing called net-asset-value financing, in which its existing stakes in closely held tech companies serve as the main collateral. With total outstanding NAV loans rising to about $4 billion last year, the firm’s long-time lender, JPMorgan Chase & Co., brough tin more banks to help shoulder the increased demand, according to people with knowledge of the financing.
Historically, VC fund managers have eschewed debt, which may be hard to get at any price when your main assets are cash-burning startups that can be hard to value and often destined to fail. […]