Tiger Cub Philippe Laffont has been talking up his bullishness on technology companies. Now he's on a roll.
The venture capital arm of his Coatue Management increased its private investments in the second quarter, making at least 12 new deals through June 27, according to Crunchbase. This is double the six Coatue made in the first quarter and the firm’s second-highest quarterly total in two and a half years.
Of course, this is a fraction of the deals made in Coatue’s most active days — 2021 and 2022 — when it made 170 and 70 new private investments, respectively. This year’s activity, however, signals an increase in interest in the private markets by the hedge fund firm, which has a separate, large venture capital business.
In fact, in a recent appearance at the Economic Club in New York, Laffont asserted: “This year, I feel more like [it’s] the year of the privates,” The Wall Street Journal says.
In early May, the Journal had reported that Coatue is launching a new hybrid hedge fund that invests in high-growth public and private tech companies. The fund will invest 20 to 50 percent of its assets in private companies. At year-end, Coatue had $22.9 billion alone devoted to early-stage and growth venture investments, notes the Journal, citing a pitch deck it saw.
Last week, for example, Coatue and Kleiner Perkins co-led a $300 million Series E financing round for Harvey, which helps legal firms use AI to process large volumes of contracts, according to a press release. The financing round values Harvey at $5 billion. Other VC firms and investors included Sequoia Capital, GV Management, DST Global, Conviction, Elad Gil, OpenAI Startup Fund, SV Angel, Kris Fredrickson, and REV (the venture capital arm of RELX Group, which owns LexisNexis).
Also last week, Coatue and Tiger Global Management participated in a Series B $23.4 million funding round for Berlin-based Enter, a platform for energy efficiency in the real estate sector. Both firms had previously invested in the company.
Coatue’s ramped-up activity in the tech-related private markets contrasts with that of other hedge fund firms that previously participated in VC, either through a hedge fund or a separate VC business. Many continue to make just a handful of private investments or sit out the market altogether, according to an analysis of the Crunchbase database.
The most notable example is Tiger Global Management, once the leader in private tech-related investments. The firm led by Chase Coleman made just five new investments in the second quarter through June 27, including Enter, compared with 15 in the first quarter, per Crunchbase. This compares with Tiger Global’s 289 new investments in 2022 and 345 in 2021.
Most other hedge fund firms known for making VC investments in the past made few deals or sat out the strategy altogether in the second quarter.
For example, Two Sigma Ventures made just two new private investments in the second quarter, compared with one in the first three months. It made 13 in 2023, according to Crunchbase. D1 Capital Partners made one new investment compared with two in the previous quarter, per the database, after making 20 in 2022 and 76 in 2023. Lone Pine Capital and Third Point Ventures each made just one new private investment in the second quarter after passing during the previous quarter.
Most other firms previously known for being active in the space made no new investments last quarter. They include Whale Rock Capital Management, which has not made a new VC investment since first-quarter 2022; Maverick Capital, which made just one investment in the first quarter; Light Street Capital; and Valiant Capital Partners.
