Venture firm Sequoia Capital to split into 3 parts: U.S. and Europe, China, and Southeast Asia and India

Sequoia Capital, one of the world’s leading venture firms, is reorganizing its global business into three distinct geographic units. In a recent announcement to its investors on Tuesday morning, Sequoia Capital said it is dividing its global business into three independent entities for the U.S. and Europe, China, and Southeast Asia and India.

The firm said the decision is in response to the “increasingly complex” nature of the business landscape. The update was delivered to the limited partners by Sequoia partners Roelof Botha, Neil Shen, and Shailendra Singh, who shared a joint message. Roelof Botha will oversee the management of Sequoia’s U.S. and Europe businesses, while Neil Shen and Shailendra Singh will be responsible for running Sequoia’s China and Southeast Asia businesses, respectively.

“To deliver on our mission, we have decided to fully embrace our local-first approach,” the three partners told their investors.

The partners also announced that the restructuring process will be completed by March 31, 2024. The timing was determined through a gradual approach, taking into account the unique characteristics of each market and how the different geographic units approached their investments, according to a report by CNBC, citing to a source familiar with the matter.

This restructuring comes at a time of increasing geopolitical tensions between China and the United States, leading American businesses to approach Chinese investment with more caution. Data from PitchBook indicates a significant decline in venture investment in the U.S. compared to previous years.

Sequoia Capital’s Chinese branch has reportedly made profitable investments in companies like ByteDance, the parent company of TikTok, which has been under scrutiny from U.S. regulators and lawmakers.

The fundraising and investment strategies have varied among the different businesses within Sequoia. The source mentioned that Sequoia China chose to divide its investment strategy across multiple funds, while Sequoia’s U.S. and European businesses restructured their focus on the Sequoia Capital Fund.

The U.S. firm will maintain the Sequoia branding, while Shen’s Chinese fund, which has already been seen as an independent entity prior to the restructuring, will adopt the name HongShan in English. Singh’s Indian unit will be named Peak XV Partners.

In their message to investors, the executives stated, “It has become increasingly complex to run a decentralized investment business.” They cited market confusion arising from the shared Sequoia brand and conflicts across different entities within the portfolio.

Founded in 1972, Sequoia Capital is globally recognized as one of the leading venture capital firms that specializes in early-stage and growth-stage investments in technology startup companies. Since its inception over five decades ago, the firm has established itself as one of the leading players in the venture capital industry.

Sequoia Capital has a strong track record of backing successful startups and has been involved in funding many well-known companies and made notable investments in companies such as Apple, Google, YouTube, Airbnb, WhatsApp, and Instagram.