Sequoia India, the country’s largest venture capital after raising its USD 695 million sixth fund last August, is looking to add an additional 200 million dollars to the fund, per local financial media Mint. If the financing coming through, it’ll push the fund size closer to the 1 billion Sequoia originally targeted but eventually had to slash due to the then market conditions.
The move is driven by a growing market and reignited interests from limited partners (LPs), anonymous sources told Mint. More than 80% of Sequoia’s LPs are non-profits — universities, endowments, charities, and foundations.
Sequoia manages around USD 4.5 billion assets across several funds in India. It’s bigger than the other tier-1 venture capital funds in the country, including the likes of Nexus Venture Partners (1.39 billion as of now) and Accel.
Sequoia has been one of the most active investors in India over the past decade, with investments across a wide array of sectors, from high-profiled hotel chain Oyo Rooms, edtech upriser Byju’s, to SaaS service Freshworks, all of which are local unicorns. In the first half of this year, it has invested in 32 local startups, making it the most prolific Indian investors during the period.
In total Sequoia has more than 200 companies in its Indian portfolio.
Since its inception in India in 2006, Sequoia followed a two-pronged strategy in the market: invest in early-stage start-ups and those that are into technology or are technology-enabled. In addition to local investments, the firm also sets eye on neighboring and other regions. It intends to disburse 20-30% of its corpus in Southeast Asia.
The Silicon Valley venture capital’s Indian arm also has stakes in Australia’s online healthcare services provider HealthEngine, Bangladesh’s online merchant marketplace ShopUp, and the Stockholm-headquartered caller identity app Truecaller.
Sequoia India is making decent proceeds from selling or exiting some of its investees, one of the reasons for the renewed interests from LPs.
In December 2018, Sequoia India sold a part of its stake in Byju’s for USD 190 million, after investing USD 50 million across rounds since 2015. It still holds a minority stake in the company. Additionally, it stands to make USD 500 million from investing USD 25 million across rounds in Oyo Rooms, where its founder Ritesh Agarwal announced a USD 1.5 billion share buyback.
Sequoia has recently launched Surge, an accelerator programme dedicated to invest exclusively at the seed stage for start-ups in India and Southeast Asia.
The program, headed by Rajan Anandan, former VP, India and Southeast Asia, Google, aims to invest in 30-40 start-ups annually for four months and invest USD 1-2 million in each company. The launch of Surge signifies that Sequoia, which typically invests more in growth and later stage companies, is moving upstream into the early stage in a changing market.