Global venture capital firm Sequoia Capital has formally kicked off the process of raising money for its sixth India-dedicated fund, underlining its confidence in a country where it has invested in more than 130 startups including unicorns such as Ola, MuSigma and Zomato.
The VC firm expects the new fund - Sequoia Capital India VI Ltd - to be raised in less than a year, as per a filing with the US Securities and Exchange Commission. However, the fund is yet to mark its first close and Sequoia did not disclose the amount it plans to raise.
Email queries sent to Sequoia seeking details about the target corpus of the new fund and its investment strategy did not elicit a response till the time of publishing this report.
The announcement of the new fund launch comes a little more than two years after Sequoia was said to have closed its fifth India-focused fund worth $920 million.
The VC firm had subsequently topped up its fourth India-focused fund for the second time with another $125 million in June last year.
Sequoia Capital had raised $530 million for its fourth India-focused fund in 2014.
It had initially topped up the fourth fund with $210 million in 2015.
The sixth fund may target raising $650-700 million, around a third lower than the $920 million it secured in its previous outing, The Times of India had reported in March this year.
The fund will invest in internet, consumer and healthcare companies in India as well as Southeast Asia, the report had said. It had also stated that Sequoia may make larger, growth-stage investments in India from its new global fund. The VC firm is raising as much as $8 billion for its latest global fund.
Over the past 11 years, the venture capital firm has deployed more than $2 billion and exited over 55 firms in India.
With regard to the above-mentioned unicorns in its portfolio, it was not an early investor in any of them and came in at the growth stage.
Top-level exits
The latest fundraising initiative comes in the backdrop of senior executives leaving the firm in recent months. These include individuals who had spent more than a decade at Sequoia.
In April, VT Bharadwaj, one of the managing directors at Sequoia Capital, decided to step down after 11 years.
Last June, Gautam Mago, another managing director at Sequoia Capital, had resigned after 10 years.
While senior-level exits have been quite common at other domestic and global VCs in India including SAIF Partners, IDG Ventures India and Kalaari Capital as well, the back-to-back exits at Sequoia created a few ripples in the industry.
After the two high-profile departures, Sequoia Capital has 12 investment advisers in India including Mohit Bhatnagar, Shailesh Lakhani, Abhay Pandey, Abheek Anand and Sakshi Chopra, according to its website.
Fundraising by other VCs
Limited Partners, or investors in private equity and venture capital firms, have been upbeat on India and that has translated into successful successive fundraises by a string of major investment firms.
The fundraising is happening even as the total dry power or investible money available to be poured in through private equity, venture capital and hedge funds crossed Rs 1 lakh crore ($15 billion) as of 31 March 2018.
In April, Saama Capital raised $100 million (Rs 650 crore) for its fourth fund – Saama Capital IV Ltd, just a little over a year after making the final close of its third fund in January last year.
In July last year, SAIF Advisors Pvt. Ltd raised $350 million (Rs 2,247 crore) for its sixth fund, SAIF Partners India VI Ltd.
The new fund is SAIF Partners’ third India-focussed vehicle, and its size is almost the same as its previous two India funds.
Early last year, IDG Ventures India also marked the final close of its third fund, meeting its target corpus of $200 million (around Rs 1,332 crore).
In December 2016, Accel Partners had raised $450 million for its fifth fund to make seed and early-stage investments in Indian startups.