TPG just raised $1.6 billion for a tech-focused fund after bets on Uber, Spotify, and other private companies paid off big – and showed some of the problems with current funding models

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TPG created this fund to buy into some of the private company opportunities that didn't fit into its traditional private equity funds.

- provided some relief, but often at unfavorable financial terms and in trades that provided more opportunities for financial information to leak.Some investors and companies gave TPG the option to buy their shares or participate in other investments outside of funding rounds, but the options didn't fit neatly into the firm's private equity fund structures. In response, the firm founded TPG Tech Adjacencies .

On Monday, TPG said it raised $1.6 billion for the fund, which is set up to"provide flexible capital for founders, employees, and early investors looking for liquidity, as well as primary structured equity solutions for companies looking for additional, creative capital for growth."TTAD is led by David Trujillo, the firm's head of internet, digital media & communications, and Nehal Raj, head of software & enterprise technology.

"Through our portfolio and day-to-day interactions with leading private tech companies, we've seen a new set of financing demands arise that are unique to companies staying private longer," Trujillo told Business Insider."We created TTAD to help address these investment opportunities. It is another tool in our toolkit for entrepreneurs and businesses across various stages of growth.

A source close to TTAD said the fund has already invested in seven companies, the majority of which are new investments for TPG. The seven investments include IT software Kaseya, software developer Sonatype, payments company FreedomPay, discount hotel booking platform Hotel Tonight, and platform testing company Sauce Labs.

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