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Sequoia raises $1.35bn for India and Southeast Asia funds

Investor in unicorns Oyo, Gojek and others affirms positive regional outlook

Sequoia India has fortified its position as the top venture capital player in India and Southeast Asia.   © Reuters

CEBU, Philippines -- Silicon Valley venture capital Sequoia Capital has raised $1.35 billion for two new funds that will invest across India and Southeast Asia, according to Sequoia India managing director Shailendra Singh.

In a LinkedIn post, Singh said the company's partners have collectively committed $825 million to a growth fund and another $525 million to a venture fund. With the two new funds and an existing seed fund, Sequoia India has fortified its position as the top venture capital player in India and Southeast Asia.

Its investments in the two markets include unicorns Byju's, Oyo, Gojek, Tokopedia and One Championship. It is also invested in Philippine digital bank Tonik, Indonesian coffee chain Kopi Kenangan, co-living space operator Hmlet, digital telecom and lifestyle services provider Circles.Life, and Singapore-based Carousell, among others.

According to Sequoia India, Southeast Asia accounts for 20% to 30% of its investments by value.

"We are excited about the depth of opportunities in this region, which is undergoing a massive technology-led transformation," Singh said. "The startup ecosystem in both India and Southeast Asia has come a very long way in the last few years."

Sequoia closed its sixth India fund at $695 million in August 2018. Its fifth vehicle raised $920 million in 2016. The latest fund marks the first time the venture capital has split into two vehicles -- one for early-stage investments and another for those at the growth-stage.

The company had raised a separate $200 million fund last year under its Surge program, which invests exclusively at the seed stage for startups in India and Southeast Asia.

In his post, Singh noted that the pandemic has left founders, investors and startup employees scarred with firms struggling to grow, thus preventing large, profitable technology businesses in India and Southeast Asia from emerging.

"The COVID-19 pandemic is raging on and we're in an unprecedented humanitarian and economic crisis. It has also been a time of reflection," Singh wrote. "Where are we in the journey of the startup ecosystem in India and Southeast Asia?"

However, the pandemic has also been a catalyst for positive change as founders have shown agility in adapting to the crisis, trimmed costs and unlocked new revenue levers, he said.

"We need to build on this COVID-induced state of high performance, stick to first principles, and remain relentless in our pursuit of sustainably successful companies," he added.

A subsidiary of Sequoia Capital, the Indian unit was formed in 2000 and is headquartered in Bengaluru, with offices in Singapore, the U.S., Israel, Hong Kong and China.

Sequoia India had a good 2019 in terms of returns on investments. It reportedly reaped solid returns by paring stakes in some of its portfolio companies, including ed-tech unicorn Byju's and hospitality provider Oyo, gaining about $450 million from a partial selldown in the latter. Sequoia has injected about $27 million into Oyo across different funding rounds.

"From our vantage point, the future of our region will be shaped by those few founders who are resolutely committed to building enduring companies with unshakable foundations," Singh said. "It will take a handful of exceptional founders to show us the way, to shine the light for others to follow."

For the original story from DealStreetAsia, click here.

DealStreetAsia is a financial news site based in Singapore that focuses on private equity, venture capital and corporate investment activity in Asia, especially Southeast Asia, India and Greater China. Nikkei owns a majority stake in the company.

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