Once roaring in India, Tiger Global now whimpers. After pouring millions into Flipkart, Lee Fixel of Tiger Global is now struggling to stabilize his big wager in Indian E-commerce. Lee Fixel heads the private equity side of Tiger Global; the other side is a hedge fund. Trading public equities is simpler than managing private companies, as Mr. Fixel has discovered.
Tiger Global started investing small in Flipkart in 2009 by backing founders Binny and Sachin Bansal. Since then, Mr. Fixel has invested approximately $700 million only to see his investment turn south, in part, due to poor execution by management and competition from Amazon. Then last year, Tiger Global, along with others, effectively took control by replacing the original Flipkart co-founders.
Tiger Global alumnus, Mr. Krishnamurthy took over as Chief Executive Officer while the Flipkart co-founders found other duties. So far, Flipkart has started to turn around, at least, from where it was last year. It’s reported that Flipkart is seeking additional funds from Microsoft, Tencent, Ebay, and Paypal, but raising money is currently difficult; many Indian Unicorns have received lower valuations as seen by Softbank’s write down of its Snapdeal and Ola investments.
Mr. Fixel needs to wait longer for an exit either through an acquisition or public offering. Until then, he must continue to directly managed his Flipkart investment. As a former stock analyst, Mr. Fixel must be realizing that the private equity world is very different than public stock markets.