Sequoia Capital announces three-way split to separate China business

Venture capital firm Sequoia announced an impending split that will see the company break into three distinct partnerships serving the United States, China, and Asian markets separately. 

The move, announced on June 6, is intended to decentralize back office functions for the company. Citing increased global financial complexity and a growing brand confusion, per a post on Twitter, Sequoia said it intends to embrace its “local-first approach.”

Here is the global business update we shared with our LPs. pic.twitter.com/lGHIw1tVE5

— Sequoia Capital (@sequoia) June 6, 2023

The change will see the U.S. branch remain focused on North America-based endeavors, while a second branch will serve China and the third will handle India and other Asian markets.

Sequoia, one of the world’s largest venture capital firms by assets under management and total capitalization, came to prominence in the 1970s. Its first major investment after formation was given to Atari in 1975, just a few years before it became one of Apple’s initial investors in 1978.

Over the years, Sequoia’s had an apparent neck for finding tech darlings to invest in. Its portfolio includes early investments in Google, Cisco, Nvidia, YouTube, AirBnB, WhatsApp, Stripe, and BitClout.

The firm also invested $213.5 million in FTX 2021, a year in which FTX posted $1 billion in revenue. FTX would go on to collapse in November 2022, causing a peak weekly realized-loss total of $9 billion for the week starting November 7.

Related: Sequoia Capital marks down entire $214M FTX stake to zero

Despite the collapse, a U.S. Securities and Exchange Commission report published on Feb. 3 indicates Sequoia holds a $13.6 billion primary fund. Per TechCrunch, the company also manages a portfolio for its clients worth around $85 billion.

The Sequoia split comes at a tumultuous time for relations between the U.S. and China. Tensions rose between the two nations on June 3 after the U.S. military released footage of a Chinese destroyer buzzing a U.S. warship (the maritime equivalent of cutting someone off in traffic).

Yesterday, we shot exclusive footage from HMCS Montreal, of a Chinese warship cutting off USS Chung-Hoon, coming within 150 yards of hitting the destroyer, a move the Commander of the Montreal called “intentional” & “unprofessional”

Here’s my story on the near collison #cdnpoli pic.twitter.com/PaPLSwVNkp

— Mackenzie Gray (@Gray_Mackenzie) June 4, 2023

U.S.–Chinese relations have recently been described as chilly after a series of other close-calls in 2023 have both nations on edge. A May incident involving what U.S. military officials deem as a dangerous fly-by from a Chinese fighter jet forced a U.S. recon plane to take evasive maneuvers, and a February incident wherein a Chinese surveillance balloon — a weather balloon, according to Chinese authorities — was found floating over U.S. airspace in Montana.

Going forward, Sequoia’s U.S. and European arms will continue to operate under the Sequoia banner while its India and Southeast Asia arm will rebrand to “Peak XV Partners.” The firm’s China branch will retain its Chinese-language name and will be called “HongShan” in English.

According to the firm, the changes will be complete no later than March 31, 2024.