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Venture capital firm Sequoia has announced an upcoming spin-off that will split the company into three separate partnerships serving the US, Chinese and Asian markets separately.
The move, which was announced on June 6, aims to decentralize the company’s back office functions. Citing growing global financial complexity and growing brand confusion, according to a Twitter post, Sequoia said it intends to take its “local approach.”
Here is the global business update we shared with our LPs. pic.twitter.com/lGHIw1tVE5
— Sequoia Capital (@sequoia) June 6, 2023
This change will result in the US branch continuing to focus on operations in North America, while a second branch will serve China and a third branch will serve India and other Asian markets.
Sequoia, one of the world’s largest venture capital companies in terms of assets under management and total capitalization, came to prominence in the 1970s. Her first major post-formation investment was with Atari in 1975, just a few years before she became one of Apple’s first investors in 1978.
Over the years, Sequoia has had an obvious penchant for looking for technology favorites to invest in. Her portfolio includes early investments in Google, Cisco, Nvidia, YouTube, AirBnB, WhatsApp, Stripe and BitClout.
The firm also invested $213.5 million in FTX 2021, the year FTX generated $1 billion in revenue. FTX will collapse in November 2022, resulting in a peak weekly loss of $9 billion for the week beginning November 7th.
Related: Sequoia Capital cuts its entire $214M stake in FTX to zero
Despite the crash, a report from the U.S. Securities and Exchange Commission released Feb. 3 indicates that Sequoia owns a $13.6 billion primary fund. According to TechCrunch, the company also manages a portfolio of around $85 billion of its clients.
The Sequoia split comes at a turbulent time for US-China relations. Tensions between the two countries rose on June 3 after the US military released footage of a Chinese destroyer buzzing over a US warship (the naval equivalent of cutting someone off on the move).
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
Relations between the US and China have recently been described as tepid, after a series of other tense conversations in 2023 that have left both countries on edge. A May incident involving what U.S. military officials believed was a dangerous Chinese fighter overflight forced a U.S. reconnaissance aircraft to take evasive maneuvers, and a February incident in which a Chinese reconnaissance balloon — a weather balloon, according to Chinese authorities — was found floating over U.S. airspace in the state Montana.
Going forward, Sequoia’s businesses in the US and Europe will continue to operate under the Sequoia banner, while Sequoia’s businesses in India and Southeast Asia will be renamed Peak XV Partners. The firm’s branch office in China will retain its Chinese name and be referred to as “HongShan” in English.
According to the firm, the changes will be completed no later than March 31, 2024.