US-based venture capital firm Sequoia Capital is reducing the size of its sixth India fund by almost 25 per cent to $650-700 million as investors tread cautiously, said a Times of India report published on March 19.
After raking in $920 million for its fifth fund two years ago, the Silicon Valley-headquartered firms was reportedly looking to raise $1 billion for the sixth fund, which would have been the largest India-focused fund till date. The media reports further said that the corpus would be raised across multiple vehicles, and could also have two separate investment committees for each fund.
Sequoia – which is invested in Indian companies such as Zomato, OYO Rooms, Mobikwik, beer brand Bira, and Grofers – would deploy India Fund VI across internet, consumer and healthcare companies here as well as in Southeast Asia, the report said, quoting sources.
Sequoia Capital’s local team also leads investments in Southeast Asia and has set up an office in Singapore, and that’s why the region holds a great importance for the firm as far as investments are concerned.
For larger investments in India, Sequoia may allocate a sizable amount from its proposed $6-7 global growth fund, as reported by the US media.
Since its foray into India in 2006, Sequoia has invested in over 100 companies across sectors such as, healthcare, consumer and financial services. Currently, Sequoia Capital India manages about $3.2 billion of investments.
VC funds are increasingly getting attracted towards Indian tech and internet startups and raising funds to invest in the same. Recently, it was reported that domestic private equity firm True North was in the process of raising a $1 billion fund. Besides, SAIF Partners is also on road to raise around $400 million for its new fund. India and US-focused Nexus Venture Partner is also looking to raise $400 million for its new fund.
In December 2016, Bengaluru-based Accel Partners India raised its fifth $450 million fund. Apart from India and Southeast Asia, China is another big market for Sequoia. As per a filing, Sequoia’s China Growth Fund IV has raised about $900 million to invest in startups in the Chinese market.