From ET Realty
MUMBAI: Silicon Valley’s top-tier venture fund Sequoia Capital is learnt to have closed a new $920 million fund, capital from which will largely be ploughed into Indian companies. This massive raise signals the long-term bullishness of investors around domestic startups even in the backdrop of not-so-great global macro indicators. The fresh dry powder takes Sequoia’s total assets under management to more than $3 billion in India.
This is the biggest raise by any VC fund for India-specific investments, cementing Sequoia’s leadership position in the domestic early-to-growth stage investing space.
Media had reported on September 8 last year about Sequoia Capital, a backer of companies like Just Dial, Freecharge, Zomato, Oyo Rooms, among others, being on the road to raise its fifth India fund. At the time, Sequoia was looking to shore up $800 million.
The latest fund closure comes at a time when risk investors like Sequoia have turned cautious and the exuberance around funding companies has significantly slowed down after a slug of money flooded Indian consumer internet startups over the past more than a year. Sequoia’s Fund V closed more than a month ago, with most of the regulatory work already completed, said sources who did not want to be named. The same set of limited partners or LPs -investors who provide capital to funds have pumped in the new money. A formal announcement from Sequoia is still awaited. An email sent to a Sequoia Capital India spokesperson did not elicit a response till the time of going to press.
Asian Venture Capital Journal reported Sequoia’s fund closure news on Monday .
Despite heightened venture activity in the last two years, exits for investors are still a big concern in India, unlike more mature markets like the US and China. While 2015 saw mergers and acquisitions, led by the larger startups like Snapdeal, Flipkart and Ola, those were mostly a move towards consolidation.
Sequoia, which had backed tech giants like Google and Apple in their very early stages, will see the new fund invest in Indian and south east Asian companies, just like its Fund IV. In April last year, Sequoia had added another $210 million to its existing $530 million-India fund which it had raised in 2014.
Last year, Sequoia’s peers, including Accel Partners, SAIF Partners, Kalaari Capital and Lightspeed India, racked up new capital amid an unparalleled deal-making environment. As deals closed in weeks and valuations shot up rapidly, leading to competitiveness among VCs, the well-capitalized investors went on a tear and took dozens of bets on companies led by the likes of Sequoia. Some of the fund’s investments last year included Oyo Rooms, Grofers, Roadrunnr and Craftsvilla, among others. Since Sequoia started operations here in 2006, the fund has invested in 100-plus companies across sectors such as technology, healthcare, consumer and financial services.