Sequoia targets $1.45b for China VC, growth funds

The fundraising targets - between $500 million and $550 million for Sequoia China Venture Fund VI and between $850 million and $900 million for Sequoia China Growth Fund IV - were first reported by Bloomberg. The numbers have since been confirmed to AVCJ by sources close to the fundraising process. Regulatory filings for the two vehicles were made in February, but no targets were disclosed.

While top-up funds that allow VC firms to make later-stage investments in start-ups are a relatively new phenomenon in China, Sequoia has pursued venture and growth strategies - each of which has a dedicated team - for some years. Its first VC fund closed at $200 million in 2005 and was followed by a debut growth vehicle, with a corpus of $500 million, in 2006.

Sequoia's previous venture fund closed in 2014 at $450 million, and a growth fund of $625 million was raised last year. The GP also manages several renminbi-denominated vehicles.

The Sequoia China franchise, which was set up by Neil Shen, co-founder of online travel company Ctrip International, in 2005, has backed a string of start-ups that have gone on to achieve billion-dollar valuations. For example, it was an early investor in Dianping and Meituan - the recently-merged dominant players in the online-to-offline services space - and in drone manufacturer DJI.

The firm is also a participant in take-private transactions for US-listed Chinese companies that now want to pursue domestic listings, including Qihoo 360 Technology, Jumei, WuXi PharmaTech and iKang Healthcare.

Speaking to AVCJ last year, Shen drew contrasts between the start-up environment when he founded Ctrip and how the market looks today, with its full spectrum of investors, from seed, angel, and venture capital to growth capital.

"Go back 10 years and the opportunity was concentrated in the TMT [technology, media and telecom] sector," he said. "It is getting broader now. In addition to TMT, we see opportunities in healthcare, consumer and to certain extent cleantech and energy. Another difference is mobile internet, which has brought down entry barriers for entrepreneurs. During the PC era, it took time to come up with a product but today it's much faster - and that also means more competition."

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