VC powerhouse Sequoia splits China and India units

Sequoia Capital, one of Silicon Valley’s most prominent venture capital firms, is undergoing a significant transformation as it splits into three separate entities, separating the Chinese and US operations.

This week, the company announced its plan to divide into three independent partnerships. Sequoia’s operations in China will now be called HongShan, while its business in India and Southeast Asia will be called Peak XV Partners. The firm’s operations in the United States and Europe will retain the Sequoia Capital brand. The split is expected to be finalized no later than March 2024.

Sequoia Split explained

The move apparently comes amidst mounting tensions between the United States and China and increasing scrutiny over Chinese investments and access to advanced technologies. However, the managing partners at Sequoia have denied that geopolitical tensions were the catalyst for the move. 

“It has become increasingly complex to run a decentralized global investment business,” said a statement from Sequoia’s managing partner Roelof Botha; the firm’s China head, Neil Shen; and its India head, Shailendra Singh. “This has made using centralized back-office functions more of a hindrance than an advantage.” 

Here is the global business update we shared with our LPs. pic.twitter.com/lGHIw1tVE5

— Sequoia Capital (@sequoia) June 6, 2023

“Each entity is now a market leader” the company said, adding that they have decided to fully embrace the local-first approach. “We will move to completely independent partnerships and become distinct firms with separate brands no later than March 31, 2024.” Each business will continue to serve the founders and ecosystems where they operate with the flexibility that comes with an independent brand. 

Sequoia Capital

Founded in 1972 in California as a $3 million fund, Sequoia has become a venture capital powerhouse in Silicon Valley’s tech hub for its early investments.

Sequoia, named after California’s famous redwood trees, the venture capital firm has a long-standing history of early investments in successful tech companies, including Google, Apple, Airbnb, and many others. In China, the firm has been a major player, investing in prominent companies such as ByteDance, the parent company of TikTok, Ant Group, food delivery company Meituan, e-commerce platform Pinduoduo, and fast-fashion retailer Shein. Sequoia’s investments in China cover a wide range of sectors, including electric vehicles, healthcare, and biotech.

With over $53 billion in assets under management in the United States and Europe, $56 billion in China, and $9 billion in India and Southeast Asia, Sequoia Capital has consistently delivered impressive returns. In the past five years alone, its US and European operations generated over $30 billion in returns, according to media reports.

The split into three independent partnerships allows Sequoia Capital to adapt to the changing dynamics of the global investment landscape while navigating the complex relationships between the United States, China, and other regions.

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