Tiger Global has poured more than $1 billion into SoftBank Group, according to the Financial Times . The newspaper reports that the firm told investors SoftBank’s shares are “meaningfully undervalued.” In response to a request for comment, SoftBank sent the same statement to TechCrunch as other media outlets: “We continue to believe the market significantly undervalues our stock and we welcome the support from a sophisticated institutional investor like Tiger Global.” Tiger Global and SoftBank share several investments in common, including Alibaba, Flipkart and Uber. According to a quarterly investor letter obtained by the Financial Times, Tiger Global wrote that “the combination of a world-class set of assets trading at a record discount to net asset value strikes us as an odd anomaly that is unlikely to exist forever.” It also said that “in our view, the opportunity to buy the shares cheaply exists today because SoftBank’s stock has not appreciated in nearly five years, even though the value of its Alibaba stake has increased by over $90 billion, more than SoftBank’s entire market capitalization.” The Financial Times reports that Tiger Global believes SoftBank can create an additional $73 billion of value before tax if its $100 billion Vision Fund returns 2.5 times its original investment over the next seven years. Other growth prospects it cited include the upcoming initial public offering of SoftBank Mobile , its Japanese telecoms unit, and the potential merger of Sprint, which SoftBank holds a majority stake in, and T-Mobile, pending regulatory approval.
There was a time not so long ago when nine-figure venture capital rounds weren’t a near-daily feature of tech business news. But now funding rounds of $100 million or more cross the wires with stunning frequency . The era of supergiant rounds is now the new normal. This is attributable, in part, to billions of dollars flowing into new venture capital funds — the largest of which are raised by the oldest, most entrenched firms — and competition from relative newcomers, like SoftBank . Q2 2018 may have set new records for worldwide VC deal and dollar volume in this post-dot com cycle, but that belies an important fact: Investors are dumping the bulk of capital into a relatively small number of companies. The rise of supergiant rounds wound up in a “takeover” of the market. The chart below shows the proportion of capital raised in rounds of $100 million or more, tracing the period between Q1 2017 and the end of Q2 2018. Just a little over a year ago, in Q1 2017, nine and 10-figure venture capital deals accounted for a healthy 35 percent of global dollar volume. Five quarters later, in Q2 2018, $100 million-and-up deals accounted for a majority — some 61 percent — of equity funding into upstart technology companies. It’s not just that these mega-rounds are eclipsing smaller counterparts as a percent of dollar volume totals. Supergiant rounds also appear to be driving most of the growth in reported dollar volume, as the chart below shows. Between Q1 2017 and Q2 2018, reported dollar volume in sub-$100 million deals grew by around 42 percent. By that same token, dollar volume in nine and 10-figure venture deals ballooned by about 325 percent over that stretch of time. Granted, this is all based on recorded data in Crunchbase. And like all private-market databases, Crunchbase is subject to some reporting delays