Maybe the good times aren’t over.
Sequoia Capital—which has invested in some of the biggest names in the startup world, from Apple to Instacart—is raising two new U.S.-focused funds of up to $2.25 billion, according to a report in The Information.
The Menlo Park, California-based venture titan is looking to close a $1.5 billion U.S. growth fund focused on mature private companies, and a $750 million fund focused on earlier-stage startups. According to the report, the firm expects to close the funds in July.
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The new funds will be “sub-funds” after Sequoia Capital did away with the typical 10-year fund model and created a new, open-ended Sequoia Capital Fund late last year. That fund distributes money into close-ended sub-funds such as seed, venture and growth for new investment. Any exits from those funds replenish the main Sequoia Fund in a type of VC-related symbiotic relationship.
The report comes just about a month after Sequoia warned founders in a slide presentation over Zoom of a “crucible moment” of uncertainty for the venture market due to inflation, the markets and geopolitical issues.
Despite that warning, Sequoia has remained on a robust investment pace through the first half of the year. According to Crunchbase data, the firm has made 90 investments through the first half of the year—ahead of its pace last year when it made 84 deals through the first six months.
However, although deal count is up, total money in those rounds is down, Crunchbase data shows. In the first half of this year, Sequoia has participated in deals worth a total of $9 billion, compared to total rounds in the first half of last year worth $14.1 billion, according to Crunchbase.
Nevertheless, raising the new funds will be a significant show of strength for Sequoia in regards to its relationship with its limited partners. Despite a market wobbling along, the ability to convince LPs to part with another $2.25 billion makes a statement. That is especially true at a time when public portfolios are falling in value and many LPs are overexposed to the private market.
Earlier this year, it was reported Sequoia Capital China—an affiliate of Sequoia who may be best known in the U.S. as an investor in ByteDance—was raising four new funds totaling $8 billion.
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Illustration: Dom Guzman
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