Philippe Laffont’s Coatue Management has launched another new venture capital fund.
Coatue, one of the most aggressive hedge fund investors in private companies, is raising money for Coatue Early Stage Fund, according to a regulatory filing. It is not clear how much money it has raised or whether it has begun investing. The firm declined to comment.
This is the second venture capital fund that Coatue — a so-called Tiger Cub because its founder worked for Julian Robertson’s Tiger Management — has launched in roughly a year.
As Institutional Investor earlier reported, last fall Coatue raised at least $1.3 billion for the Coatue Kona III fund and an offshore counterpart. This was before the fund’s final close, which had been scheduled for October 2017, according to a letter sent by Coatue to investors and obtained at the time by Institutional Investor.
Over the years, Coatue has made at least 52 private investments, including 18 where it was the lead investor, according to venture capital tracker crunchbase.com. Most of the investments were made in Series C and Series D financings, according to the website.
The new fund’s name suggests it will focus on less seasoned private companies. Until now, very few of Coatue’s investments have been at the early stage of a company’s development.
As more and more money pours into private companies — and as more seasoned private companies wait longer to go public than in the past — some market observers have expressed concern that the bigger, more seasoned companies’ valuations have been inflated.
According to a recent report from PitchBook, the median valuations among late-stage rounds of financings increased 50.7 percent year over year. This compares with a 27.5 percent increase for early-stage deals and just 11.8 percent for angel and seed deals.
Apparently, Coatue sees opportunities in companies at closer to their start-up stage.
“The rise in valuations can be partially attributed to the buildup of dry powder, enabling mega-funds to funnel significant capital into mature and high-growth ventures, as well as increased competition for a finite number of high-growth, late-stage opportunities,” PitchBook stated in its report. “As startups have seen a rise in valuations and deal sizes, investors have also been taking a larger ownership position at the very early stages.”
Meanwhile, in just the past two weeks or so, Coatue has made at least four investments in private companies. The firm participated in the $30.5 million Series B financing of PlayVS, an online gaming provider that is introducing esports to high schools and state associations. Coatue previously invested in the company’s Series A round.
This month Coatue also participated in the latest financing of grocery delivery company Instacart. Other investors included Valiant Capital Management, which like Coatue was a previous investor, as well as Tiger Global Management and D1 Capital, according to Reuters.
Coatue also recently co-led the $100 million Series C financing for Airtable, which provides a cloud-based spreadsheet application, according to the Wall Street Journal. It is now valued at $1.1 billion, making it a unicorn, according to the newspaper.
Finally, Agora.io, which offers a voice, video and live broadcasting platform, said in a press release that it closed on a $70 million Series C financing round led by Coatue Management.
