VC giant Sequoia splits up to form three independent companies

Venture capital giant Sequoia is one of the greatest institutions in the startup investing business, with around $85 billion in assets under management, as of 2022. Its 1,700+ portfolio companies include big names such as Apple, Zoom, Stripe, NuBank, WhatsApp, and Block, with over 160 unicorns, and more than 470 portfolio exits.

Over the past 15 years, the VC firm partnered with local leaders in emerging markets such as China and India that understand the local startup ecosystems, to form Sequoia China and Sequoia India/SEA. Sequoia India & SEA has raised $9.2 billion across 13 funds, and invested in over 400 start-ups in the region. With over 50 companies in its portfolio crossing $1 billion in value, 19 IPOs and multiple successful M&A events, resulting in $4.5 billion of realized exits so far, the company has done great for startups and founders in emerging markets.

But data from market intelligence platform Tracxn show that Sequoia's investments in India, across stages, fell 95% to $114.1 million in May 2023 from roughly $2.1 billion in the same period in 2022, due to the funding crunch amid a global economic crisis.

Sequoia also believes that "the strategies for each business have diverged and the company's scale and market leadership across different geographies has started to result in brand confusion and portfolio conflict." That's why it is announcing a move to fully independent partnerships with distinct brands, namely, Sequoia Capital for the U.S. and Europe markets, HongShan for China, and Peak XV Partners for India and Southeast Asia.

The deal is expected to be completed by March 2024. According to the firm, it has about $2.5 billion of uninvested capital for India and Southeast Asia to continue helping founders and doubling down in both regions, including expanding accelerator programs Surge and Spark.

Editing by Loy Okezie