Markdowns On The Prowl

Tech Slump Takes a Bite Out of Tiger Global, SVB Declares Bankruptcy, and LACI Raises Greenbucks for Green Tech.

Author

Adam from VC Brags
March 17, 2023

Welcome Shareholders,

In this daily edition of the Brags Newsletter, we'll cover how Tiger Global Marks Down its investments to reflect the slumping tech valuations, the SVB Saga takes a Chapter 11 Twist, and a startup incubator makes a bold bet through a climate impact fund.

So sit back, grab a snack, and enjoy!

Venture Today 👏

From ByteDance to Stripe, Tiger Global Slashes Valuations

As startup valuations took a dive in 2022, Tiger Global slashed the value of its investments by a third.

Tiger Global's markdowns eliminated $23 billion in value from its extensive global startup holdings, including significant investments in companies like TikTok's parent ByteDance and payment firm Stripe. In the fourth quarter, the firm's latest venture funds experienced losses ranging from 9% to 25%.

Although significant, the markdowns—comprising $9 billion in the latter half of the year—underscore the private market's lag compared to similar high-growth public companies. Despite the high markdowns in its flagship funds, Tiger disclosed far significant losses in its hedge fund and long-only fund, both concentrating on high-growth, predominantly unprofitable tech firms in public markets. The hedge fund declined by 56%, while the long-only fund dropped by 67%.

  • A week after trading suspension and regulatory takeover, SVB Financial, the holding company for Silicon Valley Bank and other subsidiaries, has now filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York.

The bankruptcy filing will allow SVB to ask the courts to ask for approval to resume operations while pursuing a buyer for its subsidiaries, including SVB Securities and Capital. SVB said it had roughly $2.2 billion in liquidity and $3.3 billion in funded debt as the aggregate principal amount of unsecured notes.

The company said that the notes were tied to SVB financial group and wouldn't affect either SVB Securities or SVB Capital. Additionally, SVB said it also had $3.7 billion in outstanding preferred equity.

Who's Raising?

  • Los Angeles Cleantech Incubator has just launched its second climate impact fund with plans to raise $30 million from investors.

The company's first investors include the likes of former California Governor Arnold Schwarzenegger, with its first investments including sustainable tableware startup Repurpose and on-demand repair service for electric-vehicle charging stations developer ChargerHelp.

In 2019, LACI initiated its inaugural $5 million impact fund, investing in 17 LA-based startups focused on innovations such as electric planes, cargo bikes, shuttle buses, advanced lithium-ion batteries, and countertop food-scrap recyclers. The incubator also launched a $6 million debt fund last year to support underrepresented founders, including women and people of color, in obtaining loans.

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