Sequoia Capital, one of the largest venture capital firms globally, has announced plans to divide its global partnership into three separate geographic units, citing an “increasingly complex” environment. Sequoia China and Sequoia’s Southeast Asian arms will become independent businesses by next year. The restructuring aims to embrace a “local-first approach” to better serve the unique dynamics and investment opportunities in each region.
The decision was conveyed to limited partners by Sequoia partners Roelof Botha, Neil Shen, and Shailendra Singh. Botha oversees Sequoia’s U.S. and Europe business, while Shen and Singh manage the China and Southeast Asia divisions, respectively. The restructuring is expected to be completed by March 31, 2024.
The move comes amid rising geopolitical tensions between the U.S. and China, leading to increased scrutiny of Chinese investments by American businesses. Additionally, venture investment in the U.S. has declined significantly compared to previous years.
Sequoia’s Chinese arm has been involved in profitable investments, including in TikTok’s parent company, ByteDance, which has faced scrutiny from U.S. regulators and lawmakers. The restructuring reflects the differing fundraising and investment strategies of each region, with Sequoia China opting for multiple funds while the U.S. and European businesses focus on the Sequoia Capital Fund.
Sequoia Capital, known for its successful investments in companies like Apple, Google (now Alphabet), PayPal, and Zoom, will retain its branding in the U.S., while Shen’s Chinese fund will be named HongShan, and Singh’s Indian unit will be called Peak XV Partners.
The decision to separate the partnerships aims to address market confusion and portfolio conflicts, allowing each unit to better navigate the unique dynamics and investment landscapes of their respective regions.
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