SoftBank’s near-$100bn first Vision Fund five years ago was regarded as a seminal moment less for the outcome of its deals than for the changes to the venture business model it wrought.
The Financial Times’s report that hedge fund Tiger Global Management is raising a $10bn fund – weeks after closing a $6.7bn fund – indicates the changing landscape for venture capital at the later-stage end.
So far in 2021, Tiger Global has taken part in 100 investment rounds in just over 120 days that have raised a total of $22.2bn for private tech companies, according to data from PitchBook used by the FT.
Others are following suit judging by the first quarter data analysed in the GCV and SVB webinar last month.
Insight Partners, a venture capital and private equity firm, is reportedly seeking $12bn, the FT said.
As this column in January noted: “In a world where of effectively money is a fungible commodity, outperformance comes from understanding the drivers behind equity growth – human and physical capital and innovation and intangibles – and then being able to use this alpha to borrow more at more favourable terms to leverage returns even higher.”
This should play into corporate venturing’s hands. Whereas most will be unable to keep pace with the scale and speed of investment of the largest asset managers, many will be able to show value add to the entrepreneurs. If they focus on their offered services, then the strategic and financial benefits should follow.
Professional teams, such as Global Brain managing Japan-based JGC’s new T5bn ($45m) venture fund, as reported by DealStreetAsia, can then blend investment expertise with strategic synergies.
And these factors can be even more notable at the earliest stage.
US-based hospital and research system Mass General Brigham (MGB) through its corporate and university ventures unit said it would raise a $250m third fund.
It currently invests from $171m Partners Innovation Fund II, which has backed 47 new companies created from its hospitals and research. Its exits include the flotation of Keros, which floated in April 2020.
Partners Healthcare’s 140-person business development and investment team delivered $181m in commercialisation and investment income in 2020’s financial year and has spun off 319 companies in the past decade, according to Chris Coburn, its chief innovation officer in a town hall presentation seen by GCV.
This is powerful execution on making the world a better place rather than just a more liquid one.
