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Sequoia’s startup bet intact, to raise record $1.3 billion for new India fund

Sequoia will also, for the first time, split the corpus into two vehicles — one for early stage and other for growth stage.

Last Updated: Jan 24, 2020, 11.38 AM IST
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Sequoia also beefed up its top team last year by roping in former Google’s India and Southeast Asia head Rajan Anandan, and then Uber’s Asia head Amit Jain.
(This story originally appeared in on Jan 24, 2020)
BENGALURU: Top Silicon Valley investor Sequoia is planning to raise about $1.25 billion for its new fund for India. This will be a record corpus raised for the country, underlining the growing maturity of the Indian startup ecosystem, said two sources familiar with the development. Sequoia is known as the early backer of companies like WhatsApp and Google in the US, and Byju’s and Oyo in India.

Sequoia Capital India has sounded out its limited partners (LPs), the term for investors in venture capital funds. Sequoia’s LPs include top endowment funds and family offices. The new corpus is 80% larger than the $695 million the firm raised for its sixth fund in 2018. Till now, the largest venture fund raised for India was $920 million, also by Sequoia back in early 2016.

Sequoia will also, for the first time, split the corpus into two vehicles — one for early stage and other for growth stage. The move comes as Sequoia is holding the annual global meeting of its LPs in India for the first time at the end of March as the country has become a lucrative market in terms of returns as well for the firm.

Till now, these meetings have been held in larger markets like the US and China. “The roadshows will happen after the global LP meet and the fund will most likely be closed during the second half of the year,” said one of the sources mentioned earlier.

While $750-800 million is expected to be raised for growth fund, $450-500 million will be raised for the early stage fund, according to one source. These funds will also continue to invest in Southeast Asia, which the firm started in 2014 after setting up a Singapore office. When contacted, a Sequoia Capital India spokesperson declined to comment.

“Sequoia India’s fourth has been a turning point as it has several portfolio companies which have already given cash returns,” said another person briefed on the fund-raise. Raised in 2014, Sequoia’s fourth fund got $500 million from hospitality major Oyo and another $185 million from ed-tech unicorn Byju’s through a partial exit over the last 18 months. Some of the other prominent portfolio companies from that fund include the biggest internet players in Southeast Asia, like Indonesian ride-hailing major Go-Jek (valued at $10 billion) and online marketplace Tokopedia (valued at over $7 billion).

Sequoia also beefed up its top team last year by roping in former Google’s India and Southeast Asia head Rajan Anandan, and then Uber’s Asia head Amit Jain. These additions were after three MDs left Sequoia to form a firm — A91 Partners — which raised $351 million last year.

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