Silicon Valley venture capital firm Sequoia Capital, an early investor in some of India’s biggest startups including Byju’s, Zomato, and OYO, is set to float its largest India-focused fund with a corpus of about $1.25 billion, per a media report.
The move comes as Sequoia is set to hold annual global meeting of its limited partners (LPs) in India for the first time as it continues to be bullish on the country’s thriving startup ecosystem, The Times of India reported. Till now, such meetings were held in the US and China. Over time, India has become a key and promising market for Sequoia, both in terms of investments and returns.
The company’s officials were not available for comment at the time of publishing this article.
Sequoia’s new fund is 80 per cent bigger than its sixth India fund, which closed at $695 million in August 2018. A part of the corpus will also be spent on deals in Southeast Asia. Its fifth vehicle at $920 million, which was raised in 2016, was the largest India-dedicated vehicle till date.
The venture capital firm will also, for the first time, split the corpus into two vehicles — one for early stage and other for the growth stage, the report said. While $750-800 million is likely to be raised for the growth fund, $450-500 million will be focused on early stage deals. It has also sounded out its limited partners (LPs), the term for investors in venture capital funds.
The roadshows are expected to begin after the global LP meet, and the fund is likely to hit a close during the second half of the year, the report said quoting a source.
A subsidiary of Sequoia Capital, Sequoia Capital India was formed in 2000 and is headquartered in Bengaluru, India with offices in Singapore, California, Israel, Hong Kong, Beijing and China. It is an investor in some of China’s most successful startups, such as Alibaba, Ant Financial, Yitu, TikTok, ByteDance, and JD.com.
Sequoia Capital China Growth Fund V, the firm’s largest China growth fund to date, has gathered $1.8 billion, twice as much as the fourth fund that closed in 2017, DealStreetAsia recently reported. Sequoia has also secured $549.5 million in commitments for China Venture Fund VII from 128 investors. The fund was launched in June 2018.
2019, particularly, was good for Sequoia India in terms of returns on investments. It reportedly reaped good returns in some of its portfolio companies, including edtech unicorn Byju’s and hospitality major OYO. It mopped up about $450 million from a partial selldown in OYO. Sequoia till date infused about $27 million into the company across different funding rounds.
The firm also received 21.13 times of its Rs 78.8 crore investment amounting to Rs 1,665.33 crore in Byju’s during FY19.
Meanwhile, Sequoia is also in the process of raising a seed fund focused on its accelerator and incubator programme, Surge.