Sequoia Capital, one of Silicon Valley’s most notable venture capital firms, has decided to split into three independent partnerships. Its businesses in China and India will adopt new brands, while the firm in the United States and Europe will keep the Sequoia name. This decision comes amidst growing tensions between China and the United States concerning investment and access to advanced technologies.
Sequoia’s managing partner Roelof Botha, the firm’s China head Neil Shen, and its India head Shailendra Singh, have said that the firm’s extensive global presence has become “increasingly complex” to manage.
Sequoia’s China business will now be called HongShan, and its business in India and Southeast Asia will be called Peak XV Partners. Sequoia currently manages more than $53 billion in assets in the United States and Europe, $56 billion in China, and $9 billion in India and Southeast Asia.
Since it entered China in 2005, Sequoia has been a key player in the fast and extremely lucrative rise of Chinese tech giants. The firm has invested in over a thousand companies in China, including electric vehicles and biotech. Notable investments include ByteDance, the owner of the video app TikTok; the fintech company Ant Group; and the fast-fashion retailer Shein.
However, venture capital investors have become increasingly cautious about pouring money into China, with deal volume dropping by half last year to around $69 billion, the lowest level in six years, according to PitchBook.
Doing business in China has become increasingly complicated, particularly in sensitive industries such as technology. The United States and China are competing for economic supremacy, and the former has been considering restrictions on investments into China. The US government already prohibits domestic companies from directly selling certain technologies to China and monitors the investments made by Chinese companies in the United States. Meanwhile, the Chinese government has recently targeted advisory and consultancy firms with foreign ties, thereby raising the concern of executives in the West, as these firms help foreign businesses evaluate investments in China, which is hard to ascertain.
Chang Che and Michael J. de la Merced contributed reporting.
