Sequoia India and Southeast Asia have launched two new funds, a $2 billion seed and growth fund for India and an $850 million special fund for Southeast Asia as the legendary venture capital firm doubles the region on a scale unmatched by most of its peers and at a time when it is becoming increasingly difficult to get money.
The new funds come on a payday for the 50-year-old venture firm in India, where it began investing 16 years ago. The company, which has 11 directors in the region, has seen nine of its portfolio startups, including Freshworks, GoJek and Truecaller, go public in the past 18 months, a figure unheard of in the region until two years ago.
The public listings have delivered Sequoia India and Southeast Asia — which has raised three additional funds in the past two years, including a $525 million venture fund and an $825 million growth fund — a return of nearly $4 billion in realized and non-compliance. realized gains at the current market value, according to an analysis.
“This fundraiser, which takes place at a time when markets are beginning to cool after a very long bull run, demonstrates our deep commitment to the region and the confidence of our Limited Partners in the long-term growth story of India and Southeast Asia, the company wrote in a blog post.
The company said it plans to “double down” in the region, where it runs multiple programs — including Surge, through which it supports very young businesses, and Spark, to provide fellowship to female founders — other than venture — and growth. -investments.
“Sequoia pioneered the modern venture business exactly 50 years ago. Since then, it has consistently innovated to remain at the top of venture firms in different geographies globally,” said Sajith Pai, an investor at Blume Ventures, an India-based venture firm that focuses on early-stage deals.
“Through innovations such as the Scout program and Surge, they have pushed the boundaries of the venture capital model and expanded access to capital for founders, even while consolidating their leadership in the space.”
With hundreds of portfolio startups in the region, Sequoia India and Southeast Asia is the most prolific investor in the region. Launched three years ago, the Surge program alone has grown to 112 startups operating in more than a dozen industries. Sequoia is an investor in about three dozen of the 100 odd startups that have turned unicorn in India.
The new funds, the largest of its kind by an investor in the region, could not have closed at a better time. Countless startups across the region — and beyond — are struggling to raise funds as investors reassess the market after a sharp turnaround. Sequoia, which recently advised its founders to bring more discipline and knife sharpness, has been sounding the alarm for some time now.
The company, whose portfolio includes social commerce startup Meesho, payments giant Razorpay, fintech giant CRED and edtech giants Byju’s and Unacademy, will continue to focus on sectors such as SaaS and fintech in which it has traditionally been active, but it is also increasingly targeting more on newer categories, including web3. Most Indian venture capital firms were initially slow and reluctant to back crypto startups, a fact that becomes apparent when you look at the cap tables of some of the largest Indian crypto firms.
Sequoia India and Southeast Asia, which has supported several web3 startups, including CoinSwitch Kuber and Polygon, have gained street cred in the hot new category over the past two years, several web3 founders said. It also helps that the company has repeatedly demonstrated that it has “diamond hands”, i.e. it does not sell the crypto firms’ tokens once their waiting period ends.
“The startup and venture capital ecosystem in India and Southeast Asia has made great strides over the past decade and will continue to evolve. Valuations and speed will move with the markets. What remains is value creation in terms of revenue growth, profitability and free cash flow, rooted in true innovation, execution excellence and a maniacal focus on customers,” the company said in a blog post.
The new funds also come at a time when three of Sequoia’s India and Southeast Asia startups are grappling with governance issues. The board of Fintech giant BharatPe discovered irregularities in a founder. Singapore-based Zilingo and Indian live commerce startup Trell also found similar errors.
In at least two of these incidents, Sequoia itself was the whistleblower and held the founders accountable, according to acquaintances. In a blog post published earlier this year, Sequoia pledged to continue to take proactive steps to “drive better accountability and improve performance so we can unlock the region’s full potential.”
“While several major global crossover funds have invested in India, it is fantastic to see Sequoia raising such a large dedicated fund specifically for India,” said Rohan Malhotra, partner at Good Capital, an early stage fund. “In many ways it’s a great testament to the opportunities that global LPs and executives see in India in the coming decades.”