Sequoia Raises $695 Million For Sixth India & SEA-Focused Fund Amid Leadership Transition

Sequoia Capital announced today that it “recently closed” $695 million in its sixth India and Southeast Asia-focused venture fund.

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The statement suggested that the “newest fund underscores Sequoia’s commitment to India and SEA, where we have made over 200 investments so far.” Although China overshadows VC activity in Asia, India is still the second-biggest market, and Southeast Asia’s startup scene is flourishing.

Sequoia and its regional offshoot Sequoia Capital India have been active investors in India and Southeast Asia. One of Sequoia Capital India’s most recent investments was in Singapore-based B2B and B2C online fashion marketplace Zilingo. Most recently, it participated in the company’s $54 million Series C in April 2018.

Sequoia Capital was also an early investor in India’s restaurant review and food delivery service Zomato. Most recently, it participated in the company’s $20 million Series H in April 2017. After a February 2018 deal that landed the company $200 million from China’s Ant Financial, Zomato was valued at more than $1 billion, post-money.

Big Plans, Less Money

All this being said, it seems like this smaller sixth fund is a bit of a detour from prior plans.

With $695 million under management, Fund VI is certainly large, but it’s not the biggest pool of venture capital Sequoia managed to raise for its India-based investments. Reports indicate that Sequoia Capital India raised north $920 million for its fifth fund.

Its sixth fund for India, however, did not reach Sequoia’s target raise of $1 billion. In March, the Times Of India reported that Sequoia cut the fundraising target “by almost 25% as risk investors take a cautious view of the burgeoning early-stage technology investing ecosystem [in India].”

Although it’s possible Sequoia Capital India pulled back on its ambitions to raise a billion-dollar fund due to market forces, there’s also a potential human resources element as well.

Although Sequoia Capital also announced a number of promotions, today’s post also disclosed the departure of managing director Abhay Pandey. The post said “Abhay had wanted to create a dedicated consumer fund,” but noted that “dedicated sector funds […] are not part of Sequoia’s structure.”

According to coverage from VC Circle, there have been other major departures at Sequoia’s India outfit in recent years. In April 2018, managing director VT Bharadwaj stepped down after eleven years with the firm. Bharadwaj joined Gutam Mago, another Sequoia India managing director who left in June 2017, to start a new venture fund of their own called A91 Partners.

Sequoia India is not the only investor in the region to raise a new fund this year. Just last week, Matrix Partners India raised $300 million for a third fund (which was also smaller than the $400 million second fund announced in 2016).

There are others, too. As part of a landmark unveiling of $1.975 billion in new venture funds back in July, Lightspeed Venture Partners announced its India branch raised $175 million for its second fund. Back in May, Crunchbase News broke the story that Nexus Venture Partners, a cross-border firm with offices in Silicon Valley and India, has already raised $313 million of a targeted $450 million for its fifth fund.

Sequoia is in the midst of raising unprecedented amounts of capital (especially for its late-stage funds) as supergiant rounds explode VC deal and dollar volume worldwide. It remains to be seen how (or how much) the firm will cash in on this trend.

Thanks, Savannah, for contributing to this article.

Illustration: Li-Anne Dias