In a significant development, the four founding managing directors of Sequoia Capital India have decided to spin out of the global venture capital firm and return to their original fund Westbridge Capital Partners, sources told VCCircle.
The four original MDs who are moving out include Sumir Chadha, KP Balaraj, Sandeep Singhal and SK Jain. An official announcement is expected tomorrow morning.
The names of these executives have already been removed from Sequoia website.
Westbridge, founded in 2000, had raised two funds before merging with Sequoia Capital in May 2006. Post merger, the firm raised three funds taking the total funds under management to $1.8 billion through five funds.
The reason for the split is that the four want to focus on public equity investing as opposed to the parent Sequoia Capital's focus on private markets and early stage investing, sources close to the development told VCCircle.
The four are leaving behind the others in the team at Sequoia who will manage the firm's existing and future investments. Abhay Pandey, Mohit Bhatnagar, Shailendra Singh, VT Bharadwaj and GV Ravishankar will be managing Sequoia India from now onwards, sources said. "The split is cordial and peaceful and there is no dirt," sources added.
The four outgoing MDs will continue to support the investments of Sequoia (in about 20 companies) where they are closely involved or are on boards. But they will stop all future investments for the firm, sources added.
Westbridge has two funds - Westbridge Ventures I Investment Holdings with $140 million - which has been fully invested and whose carry has been distributed, and Westbridge Ventures II with $200 million of which about $50-60 million is yet to be invested.
The four MDs will also invest about $30 million of their personal money into this fund and will start making public equity investments, sources said. The revived Westbridge will invest about $20-50 million each in mid-cap public companies. They will be raising a fund only by year end which will be to the tune of a couple of hundred million dollars.
There is no bar on investing in private companies, but they will invest only occasionally while Sequoia India is likely to focus on private.