Sequoia raises $370m for China VC fund

According to a regulatory filing, Sequoia Capital China Venture Fund IV has raised $349.5 million, while the parallel principals fund - likely to include GP contributions - is on $20.45 million.

Sequoia also disclosed that is has raised $553 million for a US-focused venture capital fund and $277 million for an Israel VC fund. A US growth fund reached a final close of $950 million last year.

Forbes describes the strategy as something of a reversal, given that Sequoia raised $1.3 billion for an umbrella vehicle encompassing all geographies when it last came to market with venture funds in 2010. However, that same year the firm also raised around $600 million for a dedicated China growth stage fund.

Sequoia raised $200 million for its first China VC fund in 2005 and followed up with a second vehicle, worth $250 million, the next year. Its first growth fund was also raised in 2006, receiving $500 million in commitments. Since 2008, Sequoia has launched several renminbi-denominated funds, most of them collaborations with local governments.

Speaking at the 2012 AVCJ Venture Summit, which formed part of the AVCJ Forum, Neil Shen, Sequoia China's managing partner, noted that the application of a technology - ramping them up quickly in a large domestic market - is just as important as the technology itself in China. As such, successful founders aren't necessarily from a science background but entrepreneurs who are proven operators.

Shen also emphasized the importance of returnees, individuals who come back to China after being educated overseas, to the innovation space.

"Ten years ago there were very few cases when I ran into a company with a decent size run by a returnee. More likely it was a local guy who started with a distribution business and moved into R&D," he said. "Now we see a fair number of companies in the healthcare, new energy, cleantech areas founded by people who have studied and worked in the US, learned about a technology, and then come back and developed a product based on local demand."

Sequoia and DCM are investors in Vipshop, one of only three VC-backed Chinese companies to go public in the US since the start of 2012. In March, the investors said they would trim their holdings as part of the company's $181 million share issue.

Recent Sequoia VC deals include a Series B round worth $10 million for Beisen, a supplier of HR evaluation and testing tools and services. Matrix Partners also participated.

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