Sequoia Capital’s Chinese affiliate is reportedly in the market to raise 20 billion yuan (about $2.8 billion) for a new Chinese currency fund and is banking on domestic investors as backers.
According to a report by The Information, Sequoia Capital China, which is preparing to split from the main venture capital firm, is looking at approaching domestic backers for the new fund, including the government city of Hangzhou.
The launch of the new China fund comes as Sequoia China was reported to have established a new branch in Singapore, with plans to use it as a primary investment platform in Southeast Asia.
The move will see Sequoia China competing with Peak XV Partners (Sequoia India/Southeast Asia ). Sequoia Southeast Asia already operates an office in Singapore. However, sources said Peak XV sees Sequoia China as a partner rather than a competitor.
Sequoia Capital China, founded in 2005 by investment guru Neil Shen, said in February that it started deploying capital from a $480-million vehicle — Sequoia China Seed Fund II — that the firm closed last year as part of its nearly $9-billion fundraising success.
With Fund III, the Sequoia China Seed Fund — an investment unit that Sequoia China built in 2018 to focus on seed to Series A deals — has become one of China’s biggest early-stage investment platforms with almost 15 billion yuan ($2.2 billion) in assets under management.
Last month, Silicon Valley-headquartered Sequoia Capital announced it is going to split into three independent entities — Peak XV Partners, which will focus on India & Southeast Asia; HongShan to focus on China; and Sequoia Capital representing the US and Europe.
Peak XV Partners, earlier Sequoia India & Southeast Asia, will be managed by its present leadership team and will continue to invest from the most recently raised set of funds focused on India & Southeast Asia, it said.
The separation is expected to complete by March 2024 and any profit sharing between the regional funds will cease by December 31.