Global venture capital firm Sequoia Capital that invests in the country through its independent fund, is back on the road to raise a new India-focused investment corpus just over a year after raising a record amount for a single VC fund.
Sequoia has formally registered a new investment vehicle Sequoia Capital India V with the US capital market regulator Securities and Exchange Commission (SEC) early this month to invest in India. It did not disclose the target corpus but sources had previously told VCCircle that the firm was eyeing as much as $800 million, as previously reported by other publications citing unnamed people.
India's most active venture capital firm with presence across seed to growth stage investments, disclosed it expects the fundraising process to take more than a year and it is yet to make a first close for the new fund.
First close marks a fundraising milestone for PE and VC funds and often fund managers register with SEC while simultaneously disclosing the first close.
An email sent to Sequoia’s spokesperson on the new India fund remained unanswered.
Last year, Sequoia had announced that it has raised $530 million in its fourth India-focused fund to invest in technology, consumer and healthcare sectors. With this, the total capital committed to Sequoia’s India focused funds was pegged at around $2 billion. It is not clear how much of that capital from previous funds have been returned to the limited partners (LPs) who are the investors in PE and VC funds.
Early this year, The Times of India had reported citing sources that the VC firm has topped its latest fund with $210 million to take the total corpus to $740 million. This was not publicly disclosed or announced by the VC firm.
The VC firm that makes seeds investments of a few hundred thousand dollars to over $50 million growth equity investments in India also backs overseas startups.
Indeed, Sequoia's India team has invested in ventures such as Indonesian e-com venture Tokopedia and Scandinavian mobile internet startup Truecaller.
The firm's notable investments are in ventures such as handset maker Micromax and Zomato, a restaurant listing and online food ordering property that has hit the $1 billion mark. It is also a shareholder in Just Dial after selling some shares last year with stellar returns.
Its more recent investments include online branded aggregator of budget stays OYO Rooms, healthcare app Practo, hyper-local grocery delivery platforms Grofers and Peppertap besides furniture e-tailer UrbanLadder.
What is interesting about Sequoia's move is how quickly it has gone to the market to raise a fresh fund, that too after raising a large corpus last year. VC funds typically raise funds after three-five years.
The hectic pace of activity in early-stage funding in the country and a rise in valuation of startups mean VC firms need a larger corpus to stay in the game. Moreover, early stage investors also need to account for capital requirement of existing portfolio firms as they grow big. Since many of them also invest in follow-on rounds to restrict stake dilution, the VC investors need bigger corpus to bet big on the flagship portfolio companies.
Other VC funds which raised new funds this year include Accel Partners, SAIF Partners, Lightspeed Venture Partners.
Globally, besides Silicon Valley in the US, Sequoia also has offices and active investment practice in China, and Israel.