Former Tiger Global Management executive Lee Fixel has raised a $1.4bn venture capital fund less than four months after securing his first vehicle, an unusually quick pace that points to exuberance in the market for start-up investments.

Mr Fixel’s firm, Addition, finalised the fundraising this week, according to people familiar with the matter. He does not plan to begin investing the capital until next year, the people said. Addition declined to comment.

The fundraising comes as venture capitalists pick up their pace of investment following a brief lull during the early stages of the pandemic.

In the US, start-ups raised more than 220 rounds of funding larger than $100m in the third quarter, according to the data provider PitchBook, putting this year on pace to set a new record for “mega-rounds”.

Companies that help employees work remotely or provide digital healthcare services have benefited in particular, fielding outsize interest from venture capitalists.

Mr Fixel has made an auspicious debut with Addition, striking deals in a dozen companies since the onset of the pandemic in the US, according to PitchBook data.

In August, Addition led a $110m funding round in the tele-health start-up Lyra Health that valued the company at $1.1bn. Last month, the fund led a $200m financing for the cyber security start-up Snyk, valuing it at more than $2.6bn.

Both companies raised money earlier in the year before Mr Fixel came in to lead the new funding rounds.

Mr Fixel, who previously oversaw private investments for New York-based Tiger Global, raised $1.3bn for Addition’s first vehicle in June, nearly setting a record for the largest new venture capital fund.

At Tiger Global, Mr Fixel became known for early investments in start-ups such as the fitness company Peloton, whose fortunes have soared during the pandemic, bringing its market capitalisation to nearly $40bn.

Mr Fixel also drew attention for investments in Indian start-ups such as Flipkart, which sold a majority stake to Walmart in a $16bn deal. Addition does not plan to spend as much time on Indian investments, said one person familiar with the firm’s thinking.

Source: Financial Times