Know how Sequoia is going to become the largest India-focussed Venture Capital fund

Sequoia Capital India is ready for an aggressive pace of investments in the country. The Silicon Valley-headquartered venture capital firm is planning to raise about $800 million (about Rs 5,000 crore) for a new fund.

The $800-million fund will be the largest Venture Capital fund for India, and one of the biggest in the venture and growth capital category in recent years.

According to two people familiar with the development, the fund raising process is expected to begin in 6-12 months and is likely to be closed in quick time, "as is the norm with Sequoia".

Sources who knew about Sequoia's plans for a new fund said the venture capital firm may begin approaching limited partners, industry parlance for investors in these funds, as early as October.

The VC firm has nearly $2 billion under management and the new fund will make Sequoia, already a highly influential investor, one of the largest private equity and venture capital managers as well.

One person familiar with the plan said: "One idea behind such a large fund could be to counter the influence of Tiger Global, which will be good for the ecosystem."

Let’s know what experts has to say about Sequoia’s aggressive plans:

1. The VC firm has the ability to invest: Its move to raise such a large fund in quick succession will signal to entrepreneurs the firm's ability to invest across early and late-stage deals, said industry experts. In the past year, several hedge funds have entered India and firms like Tiger Global Management have been aggressively investing in early-stage deals.
Sequoia Capital has been aggressively backing mid to late stage startups after it unveiled a $530-million fourth India-focussed fund in May 2014, nearly six years after it raised its previous corpus of $725 million in August 2008. Sequoia topped up its fourth India fund with another $210 million earlier this year. "They don't have fund cycles like normal VCs," said a Bengalurubased venture capital investor, adding that the typical cycle between successive funds is 3-4 years.

2. Sequoia has participated in at least 80 deals: It has participated in at least 80 deals worth over $1.7 billion since the beginning of 2014, according to data from VCCEdge. It participated in the $100-million round raised by budget stay startup OYO Rooms, the $90-million round of healthcare app Practo, and the $80-million round of digital payments firm FreeCharge (which has since been acquired by Snapdeal).
"Sequoia has been able to balance its investments in newage businesses and older businesses in areas like life sciences (and) consumer quite well. Also, they have been one of the most prolific investors in terms of ability to get an exit," said Sanjeev Krishan, transaction services and private equity leader at PwC India.

Since last year, the VC firm has closed more than half-a-dozen investments in the life sciences space, including in Koye Pharmaceuticals, Curatio Healthcare, La Renon, MedGenome Labs, Akumentis Healthcare and Innovcare Lifesciences. Sequoia has also been actively investing in Southeast Asia from its India fund, where it has closed nearly a dozen funding deals, including in Tokopedia, mobile marketplace Carousell and analytics platform Appier.

(Image: Indiatimes)