Meet Lee Fixel, an investor who saw India's consumer internet story early

The man who helped put Flipkart, India's largest internet startup, on the world map and cemented India's startup ecosystem, is set to make a return return

Tiger is on the prowl in the market, again! After a hiatus, global private equity major Tiger Global, which recently had a successful partial exit from Flipkart, is learnt to be hunting for the next set of multi-billion ideas from India. And the person driving this process again is Lee Fixel, partner at New York-based investment firm Tiger Global Management.

One of the early large foreign investors in India and a strong believer in the country’s internet growth story, Fixel has been instrumental in making Tiger one of the prolific investors in the country’s startup space, with almost 30 portfolio companies like Hike Messenger, Ola, Delhivery, Quikr and Grofers. Fixel is also famed for delivering a career-defining 3x return on his investment in Flipkart, in which Walmart Inc acquired a majority stake in May this year. 

For Fixel, who has closed many larger deals globally, it was the first test of his investment acumen in this country, given that he was passionately involved in the affairs of Flipkart, right from strategy to execution. It was Fixel who was also driving the deal with Walmart. The PE major is said to have gained $3.5 billion from the deal, on a cumulative investment of just over $1 billion in the home-grown startup. 

“It was the largest pay-day that Indian entrepreneurs had ever seen. It calmed investors’ scepticism and showed entrepreneurs what rewards might look like. It certainly was a major milestone for the ecosystem here,” said an investor who did not wish to be named. US-based retailer Walmart has paid about $14 billion for shares from existing investors and is pouring the rest as fresh equity into the company.

The deal and Tiger’s success, however, were not always certain, and 39-year-old Fixel, it seemed at one point, was going to lose it all. Born in Florida, he attended Washington University at St Louis and London School of Economics and is also a chartered financial analyst (CFA). In 2006, he joined Tiger Global to lead the firm’s internet investments in emerging markets. 

Entrepreneurs who have worked with him in the past describe Fixel as a “no-nonsense” executive with a solid understanding of the market and a crystal clear vision for what he wants from his investee companies. “He is very accessible. You can call him up in the middle of the night to discuss business problems and he will give you quick, pragmatic answers,” said Azhar Iqubal, chief executive officer of Inshorts, a news app and a portfolio company of Tiger Global. “He moves very fast.”

Fixel has led many successful investments for Tiger globally and these include its investments in Facebook, Linkedin and Spotify, besides several other large bets in markets like China, Latin America and Africa. Spotify, which went public on the Nasdaq this April, is said to be one of Tiger’s recent large exits. He has also featured six times on the Midas List of top tech investors in the world, published annually by the Forbes magazine.

Tiger first invested in Flipkart way back in 2009, when the company, under Fixel’s supervision, put $9 million in the then small Bengaluru startup delivering books online. And since then, there was no looking back. 

Industry observers swear by his swiftness to strike deals, as though he moved about in India with a “chequebook in his back-pocket”. “Fixel is in India once a quarter and travels to Delhi and Bengaluru,” says Nitin Saluja, founder and chief executive officer of Chaayos, a tea chain. Another entrepreneur with a company that Tiger has invested in says meetings with Fixel are often to the point but free-wheeling; these typically happen over lunches.

In the four years to 2014, Fixel backed several upcoming internet businesses including Ola, Myntra, Freshdesk and Hike. At that time, he was one of the most bullish consumer internet investors around, and he also backed along the way several little-known companies like Limeroad, ShopClues, Local Oye, Chargebee and LetsBuy. 

At its peak in 2015, Tiger rounded up the year with 18 new and follow-on investments. However, soon after that, people started believing that the consumer internet story was not playing out the way it was expected. Growth in online retail, once thought to touch $100 billion, slowed. 

It was around that time when Flikpart was ceding ground to Amazon and Fixel’s largest bet was crumbling in front of his eyes. Fixel made a series of sporadic executive decisions — he merged fashion etailer Myntra with Flipkart; at Flipkart he removed the founders Sachin Bansal and Binny Bansal (not related to each other) from day-to-day control and installed long-time Tiger executive Kalyan Krishnamuthy as CEO; and almost stopped funding new deals.

In a strategy choreographed by Fixel and orchestrated by Krishnamuthy, Flipkart aggressively chased growth and managed a turnaround, even as it spent millions of investor dollars. 

Besides still owning a 4-5 per cent in Flipkart, Tiger has sizeable holdings in the country’s largest cab-hailing company Ola; PolicyBazaar, a 10-year consumer finance platform heading for a public issue, and mid-sized enterprise software company Freshdesk, among others.

Now, in 2018, with an active array of big investors and the hawkish presence of behemoths like SoftBank and Alibaba, there are undeniably buyers for larger Indian internet businesses, investors say. 

“Flipkart’s sale to Walmart and the launch of SoftBank $100-billion Vision Fund have shown that large exits are possible in India. There is renewed appetite and investor confidence,” said a Bengaluru-based investor. 

That is likely something Fixel is cognizant of as he looks at his next set of deals in the region.