Key Takeaways
- • Sequoia Capital is raising approximately $7 billion across a set of new venture funds focused on China, India, and the United States, representing a significant capital deployment initiative during market volatility.
- • The fundraising effort occurs in the context of broader economic uncertainty, following Sequoia's influential "black swan" memo characterizing the coronavirus pandemic as an unexpected, widespread financial disruption.
- • Sequoia partner Alfred Lin stated the firm remains "open for business" and positioned the downturn as a potential opportunity for identifying strong business fundamentals, citing historical precedent from the 2008 financial crisis when the firm backed companies including Airbnb and Dropbox.
- • The capital raise underscores Sequoia's competitive advantage in fundraising relative to peers during risk-off market environments, with the firm's institutional track record enabling it to attract committed capital when other investors are exercising caution.
Summary
Sequoia Capital is pursuing a $7 billion fundraising initiative across multiple regional venture funds targeting China, India, and the United States, according to sources familiar with the matter. The timing of this capital raise marks a notable statement of conviction from one of the venture industry's most established firms, as global financial markets face significant headwinds from the coronavirus pandemic and recession concerns.
The fundraising effort follows Sequoia's distribution of a "black swan" memo earlier in the month that warned portfolio founders and investors of the severe, unexpected nature of the current economic disruption. Sequoia partner Alfred Lin elaborated on the firm's rationale in a Bloomberg Television interview, stating that the memo was issued to ensure founders understood the gravity of the situation and the necessity of prioritizing cash preservation and runway extension. Lin emphasized that survival-focused financial management should take precedence across portfolio companies during the downturn.
Despite the prevailing risk-averse sentiment in capital markets, Lin signaled that Sequoia maintains active deployment capacity and investment appetite for fundamentally sound businesses. He drew a historical parallel to the 2008 financial crisis, noting that significant venture-backed successes—including Airbnb and Dropbox—were incubated during that previous recession, suggesting that strategic downturns can create opportunities for value creation. "I think a lot of funds have plenty of cash to invest. We are open for business," Lin stated, reinforcing the firm's positioning as an active participant in dealmaking despite macroeconomic uncertainty.
The $7 billion raise reflects Sequoia's structural advantages relative to competing venture firms during cyclical downturns. With a near-50-year track record and historically oversubscribed funds, Sequoia maintains stronger access to institutional capital pools than many rivals facing redemption pressure or limited fundraising momentum. A Sequoia spokesman declined to comment directly on the fundraising plans, which were initially reported by The Wall Street Journal.
The fundraising effort follows Sequoia's distribution of a "black swan" memo earlier in the month that warned portfolio founders and investors of the severe, unexpected nature of the current economic disruption. Sequoia partner Alfred Lin elaborated on the firm's rationale in a Bloomberg Television interview, stating that the memo was issued to ensure founders understood the gravity of the situation and the necessity of prioritizing cash preservation and runway extension. Lin emphasized that survival-focused financial management should take precedence across portfolio companies during the downturn.
Despite the prevailing risk-averse sentiment in capital markets, Lin signaled that Sequoia maintains active deployment capacity and investment appetite for fundamentally sound businesses. He drew a historical parallel to the 2008 financial crisis, noting that significant venture-backed successes—including Airbnb and Dropbox—were incubated during that previous recession, suggesting that strategic downturns can create opportunities for value creation. "I think a lot of funds have plenty of cash to invest. We are open for business," Lin stated, reinforcing the firm's positioning as an active participant in dealmaking despite macroeconomic uncertainty.
The $7 billion raise reflects Sequoia's structural advantages relative to competing venture firms during cyclical downturns. With a near-50-year track record and historically oversubscribed funds, Sequoia maintains stronger access to institutional capital pools than many rivals facing redemption pressure or limited fundraising momentum. A Sequoia spokesman declined to comment directly on the fundraising plans, which were initially reported by The Wall Street Journal.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.