Sequoia Capital, one of Silicon Valley’s most prominent venture capital firms, is looking to spin off its China division into an independent company amid growing tensions between China and the United States over investment and access to advanced technology. .
office announced on Tuesday The company said it plans to split into three independent partnerships, with operations in China and India adopting new brands, and companies in the United States and Europe keeping the Sequoia name. Sequoia managing partner Roelof Botha said managing the company’s vast global footprint is “increasingly complex.” Neil Shen, the company’s China head. India’s representative Shailendra Singh said in a statement:
Botha said in an interview that Sequoia has been assessing whether a centralized model makes sense “for many years.” The problem has surfaced in recent months, but “it’s become clear that the cost of putting everything together and setting the backdrop isn’t worth it,” he said.
“We are dealing with more portfolio conflicts between entities because the founders now have really global ambitions. It was there,” he said.
Sequoia’s Chinese operations will be named Hongshan. Sequoia’s operations in India and Southeast Asia are called Peak XV Partners.
Sequoia has over $53 billion in assets under management in the US and Europe, $56 billion in China, and over $9 billion in India and Southeast Asia. The company’s U.S. and European operations have generated more than $30 billion in revenue over the past five years, according to people familiar with the fund’s track record.
Since entering China in 2005, Sequoia has played a key role in the rapid and profitable rise of China’s technology giant. Its notable investments include ByteDance, owner of the video app TikTok. Fintech company Ant Group. and Shein, a fast fashion retailer. The company has invested in over 1,000 companies in China, including in emerging technology areas such as electric vehicles and biotechnology.
Sequoia’s China head, Shen, said TikTok faced wrath from US lawmakers over its ties to the Chinese government, and executives at the popular app faced questions about whether they were spying. , serves on the board of directors of ByteDance. About the Americans on behalf of Beijing.
Recently, venture capital investors have become more cautious about injecting money into China. Trading volume halved last year to about $69 billion, the lowest level in six years, according to research firm PitchBook. Not all of it is tied to geopolitical tensions, with China’s economy slowing sharply until the end of last year as it remained under strict “zero-corona” restrictions.
But doing business in China is becoming more complicated, especially in sensitive industries such as technology, as the United States and China vie for economic dominance.
The United States is considering restricting investment in China, prompting a strong backlash from some major investors. The U.S. government has already banned domestic companies from selling certain technologies directly to China and is monitoring Chinese investments in the U.S. for security risks.
Beijing’s recent targeting of foreign-linked advisory and consulting firms has alarmed Western executives. These companies help foreign companies evaluate their investments and play a particularly important role in China, where it is difficult to obtain reliable information for companies considering investing in China.
Chan Che and Michael J. de la Merced contributed to the report.
