Sequoia Capital announced on Tuesday morning that it will spin off its China and India operations into separate entities.
Sequoia India and Southeast Asia will be rebranded as Peak XV Partners and Sequoia China will become HongShan, while the US and European business will remain Sequoia Capital, the California-headquartered venture capital (VC) firm said.
"Our founder-focused, local-first approach has been key to our success in each region...The decision to establish teams with intimate understandings of their local networks and industries has enabled each entity to build a portfolio of category-leading companies," said Sequoia’s investor note, signed by the leaders of its practices in the US, China, and India.
"It has become increasingly complex to run a decentralized global investment business," the VC firm added.
The split will be completed no later than March 31, 2024. Once separated, the three independent units will stop sharing back-office functions such as IT, finance, and accounting.
Founded in 2005, Sequoia China has established itself as a prominent player in the Chinese venture capital landscape. It has a track record of successful portfolios including Pinduoduo, JD.com, Meituan Dianping, Didi Chuxing, as well as ByteDance, the parent company of TikTok.
Neil Shen, head of Sequoia China, is a prominent figure in the venture capital and technology investment community in China. Beyond his role at the VC firm, he also served as a mentor and advisor to many entrepreneurs, sharing his insights and experiences to help them navigate the challenges of building successful businesses.
The Wall Street Journal reported, citing people familiar with the matter, that Sequoia China currently manages about $56 billion in assets, with US investors accounting for about half of its total investors.
However, Sequoia China is experiencing the impact of escalating geopolitical tensions between the two powerhouses. Last year, the firm raised $8.5 billion from global investors, including US institutions, drawing scrutiny from American officials and lawmakers.
Sequoia's own business has had a tough year as tech and start-up valuations have plummeted. Among its notable setbacks is the investment in FTX, the infamous cryptocurrency exchange. Sequoia Capital held a significant stake in FTX and unfortunately suffered financial losses when the exchange eventually filed for bankruptcy.