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Sequoia marks final close of second seed fund focused on India
Photo Credit: 123RF.com

Sequoia Capital India has marked the final close of its second seed fund, as the venture capital firm continues to deepen its focus on investing in startups at an early stage. 

The close was made at $195 million (Rs 1,419 crore). 

Commenting on the final close, Rajan Anandan, managing director, Sequoia India, said that the changing consumer behaviour and the rapid pace of digitisation have been expanding opportunities available to the startup ecosystem today.

"We see this pace of innovation only accelerating despite near-term challenges and are really excited about what this means for the industry," he added.

The fund is bullish on tech-enabled ideas such as SME software-as-a-service (SaaS), edtech, healthtech, business-to-business (B2B) e-commerce, direct to consumer (D2C) brands and will continue to double down on it.

He also said that this is the decade for Indian SaaS and over a third of the startups in the first four Surge cohorts are SaaS companies.

The fundraise size of the second seed fund is almost similar to what was raised for the debut seed fund in 2019. A person told VCCircle then that the debut seed fund had raised around $200 million. 

The seed fund primarily deploys capital in startups that are part of Sequoia's accelerator and incubation programme called Surge. It also seeks to make investments in startups outside the programme, the person had told VCCircle

The first fund was sector-agnostic in line with the larger investment strategy of Sequoia. 

An email sent to Sequoia on the strategy for the second seed fund did not elicit an immediate response. 

The venture firm intensified its focus on early-stage bets when it launched the Surge programme in January 2019. It also hired Anandan, who was Google's Southeast Asia and India vice-president, as a managing director in April 2019 to focus on Surge. 

The Menlo Park-headquartered venture firm has invested in more than 130 startups in India including unicorns such as Ola, MuSigma and Zomato, though it was not an early investor in any of them. 

Last year, Sequoia received commitments worth $1.35 billion (about Rs 10,030 crore) across a venture fund and a growth fund. 

This was the largest corpus that the storied venture capital firm has raised for India and Southeast Asia. 

In 2020, Sequoia continued to hold its pole position as the most active venture firm. 

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