Sequoia Capital has all but finished raising two new funds for China, including a targeted $225 million early stage fund and a $450 million growth stage fund.
The early stage vehicle has raised $226 million, while the growth fund has raised nearly $444 million, according to recent regulatory filings. (The filings show that the early stage fund expects to pay nearly $51 million in salaries and fees to its officers, directors and affiliates, while the growth fund expects about $100 million to go to fees.)
Sequoia’s global expansion has met with some reticence from its limited partners. At least one institution, the Yale Endowment, complained that the firm was hitting it up to expand into areas where it had no historic success. Sequoia responded by kicking Yale out of its core fund, according to a story in The Wall Street Journal.
Sequoia started raising its China growth vehicle as early as August 2006. It fleshed out its primary team of general partners with a group of associates. It hired Kevin Pan away from China International Capital Corp. Ltd., where he was an investment banker, Glen Sun away from General Atlantic, where he was focused on IT-related growth stage investment in China, and Shauna Xie away from the Monitor Group, where she was management consultant.
So far this year, Sequoia has made at least three investments in China. It invested in peer-to-peer video sharing site UUSee’s $23.5 million second round of financing in March, social networking and blog site 51.com’s $10 million second round of financing in May and Internet advertising platform CTS Media’s $8 million second round, also in May, according to Thomson Financial (publisher of VCJ).
Last year, Sequoia investeda total of $65.5 million in nine Chinese startups. The average deal size for China is $7.3 million, nearly 50% more than the firm’s overall average for 2006.
Inside India, too
The firm hasn’t limited its expansion to China. Sequoia Capital India recently closed its third fund with $300 million. The fund will invest in high-growth early stage companies across sectors, the company said in a statement.
With the new fund, Sequoia Capital India, formerly known as WestBridge Capital Partners, now manages more than $1 billion in capital for India across three funds and a growth equity fund. Its investments include Applabs Technologies, Bharti Telesoft, Cafe Coffee Day, FirstSource Solutions Ltd., Idea Cellular, Travelguru and Shaadi. —Alexander Haislip