Sequoia India and Southeast Asia raises $2.85 billion – TechCrunch

Sequoia India and Southeast Asia launched two new funds, a $2 billion seed, venture and growth fund for India and a dedicated $850 million fund for Southeast Asia, as the famed venture capital firm doubles down on its presence in the region on a scale unmatched by most of its peers and at a time when money is proving increasingly hard to come by.

The new funds follow a payday for the 50-year-old venture capital firm in India, where it began investing 16 years ago. The company, which has 11 chief executives in the region, has seen nine of its portfolio startups, including Freshworks, GoJek and Truecaller, go public in the past 18 months, a number unheard of in the region until a while ago. two years.

Public listings have seen Sequoia India and Southeast Asia – which has raised three additional funds including a $525m venture fund and an $825m growth fund over the past two years – a return of nearly $4 billion in realized and unrealized gains in current market value, according to an analysis.

“This fundraising, which comes at a time when markets are starting to cool off after a very long bull run, demonstrates our deep commitment to the region and the confidence our sponsors have in the long-term growth story. term from India and Southeast Asia,” the company wrote in a blog post.

The company said it intends to “double down” in the region, where it runs several programs – including Surge, through which it supports start-ups, and Spark, to provide scholarship for female founders – other than venture capital and growth investments.

“Sequoia pioneered the modern venture capital firm exactly 50 years ago. Since then, it has consistently innovated to stay in the top ranks of venture capital firms globally across all geographies,” said Sajith Pai, investor at Blume Ventures, an India-based venture capital firm that focuses on early-stage transactions.

“Through innovations like the Scout and Surge program, they have pushed the boundaries of the venture capital model, expanding access to capital for founders, while solidifying their leadership in the space.”

Shailendra Singh (left) and Rajan Anandan, managing directors of Sequoia India and Southeast Asia, during a Surge session. (Image credits: Sequoia India and Southeast Asia.)

With hundreds of portfolio startups in the region, Sequoia India and Southeast Asia is the region’s most prolific investor. The Surge program, launched three years ago, alone has 112 startups operating in more than a dozen industries. Sequoia is an investor in about three dozen of the 100 Weird Startups that have become unicorns in India.

The new funds, the largest of their kind by any investor in the region, could not have closed at a better time. Dozens of 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 in more discipline and focus, has been sounding the alarm for some time.

The company, whose portfolio includes social commerce startup Meesho, neobank and payments processor Razorpay, fintech giants CRED and Pine Labs, and edtech groups Byju’s and Unacademy, will continue to focus on sectors such as the SaaS and fintech in which it traditionally operates, but it also emphasizes new categories, including web3. Most Indian venture capital firms were initially slow and reluctant to back crypto startups, a fact that stands out when you look at some of the biggest Indian crypto companies.

Sequoia India and Southeast Asia, which has backed several web3 startups including CoinSwitch Kuber and Polygon, has gained credibility in the hot new category over the past two years, several web3 founders said. It is also useful if the company has on several occasions demonstrated that it has “diamond hands”, i.e. it does not sell crypto companies’ tokens as soon as their vesting period expires.

“The startup and venture capital ecosystem in India and Southeast Asia has made great strides over the past decade and will continue to mature. Valuations and velocity will move with the markets. What endures is the creation of value in terms of revenue growth, profitability and free cash flow, rooted in true innovation, excellence in execution and an obsessive focus on customers,” said the company said in a blog post.

The new funds also come at a time when three of Sequoia India and Southeast Asia’s portfolio startups are struggling with governance issues. The board of directors of fintech giant BharatPe has discovered irregularities with a founder. Singapore-based Zilingo and Indian live-commerce startup Trell also found similar failures.

In at least two of those incidents, Sequoia itself was the whistleblower, holding the founders accountable, according to people familiar with the matter. In a blog post published earlier this year, Sequoia pledged to continue taking proactive steps to “enhance accountability, as well as performance improvement, so that we can unlock the full potential this region has to offer.” to offer “.

“While there have been several large global crossover funds investing in India, it is fantastic to see Sequoia raise such a large fund specifically for India,” said Rohan Malhotra, partner at Good Capital, a start-up fund. . “In many ways, this is a great testament to the opportunity LPs and global managers see in the decades to come in India.”

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