Sequoia raises $2.5b for China funds

The GP raised $1.8 billion for Sequoia Capital China Growth Fund V, $550 million for Sequoia Capital China Venture Fund VII, and $150 million for Sequoia Capital China Seed Fund I, according to a source familiar with the situation. Each vehicle closed at the top end of its targeted range.

Last week, Sequoia’s India team announced it had completed fundraising for its sixth vehicle – which invests in early and growth-stage companies – at $695 million. It was previously said to be seeking $625-675 million.

The Sequoia China franchise, which was established by Neil Shen in 2005, has pursued venture and growth strategies for more than a decade. The firm’s last venture fund closed in 2016, but the filing doesn’t specify how much was raised. At the time, the target was put at $500-550 million. While the successor vehicle is roughly the same size, the growth fund has seen a substantial step up from the $899.5 million raised for the previous vintage.

This could be linked to the number of Sequoia-backed companies that achieved scale but have yet to go public, meaning there is scope for early investors to continue supporting them for longer. Of the 164 unicorns identified in a Chinese government report published earlier this year, Sequoia is an investor in 35. The GP’s portfolio includes the likes of Didi Chuxing, Meituan-Dianping, Jinri Toutiao, Bitmain Technologies, DJI, and Nio. Both Meituan-Dianping and Nio have filed for IPOs in recent months.

Sequoia is also raising upwards of $6 billion for a global growth fund, with a $250 million minimum commitment for new investors. A substantial portion of the capital is expected to be invested in the firm’s larger Chinese companies.

The seed vehicle is a new addition to Sequoia’s line-up of funds. Just as the growth fund allows Sequoia to participate in later rounds, the seed fund means it can go earlier, accessing attractive opportunities before valuations begin to escalate. The firm is already an LP in various smaller venture funds as a means of generating information and deal flow.

Sequoia is one of few venture capital firms in China to raise multiple funds that enable it to operate across the spectrum. GGV Capital is another, having recently indicated it would target $1.88 billion. As was the case in the previous vintage, there are seed, early and growth-stage vehicles, as well as an entrepreneurs fund through which members of the GGV network can take part in deals. Sequoia has previously raised principals funds that serve a similar purpose.

Several other GPs reaching final closes this year have seen meaningful jumps in fund size on the previous vintage. Qiming Venture Partners went from $648 million on Fund V to $935 million on Fund VI – as well as raising RMB2.1 billion ($334 million) for a renminbi-denominated vehicle – while Matrix Partners China closed Fund V at $750 million, up from $500 million. Others posting increases include Sinovation Ventures and Vision Plus Capital Partners.

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• Topics
• Greater China
• Fundraising
• Venture
• Growth
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• China
• Sequoia Capital
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• Venture