What do companies like Apple, Airbnb, Cisco, YouTube, PayPal and Google have in common?
They all received funding from “Sequoia Capital” when they were mere start-ups. Sequoia is the most successful venture capital firm in the entire world and has invested in companies, mostly techs, that have shaped the world. Let’s get a deeper understanding about Sequoia Capital-
Sequoia capital was founded in 1972 in Menlo Park, California by Don Valentine. He worked as a Sales engineer for Raytheon, Fairchild Semiconductor (the Company which built the first Silicon Circuit) and National Semiconductor before Sequoia. He was a part of Silicon Valley before its rise to its name ‘Silicon Valley’ and witnessed the birth of the electronics and tech industries.
The first investment of Sequoia was in Atari, an Arcade and Video Game Company in 1975. Three years later, Don Valentine wrote a cheque for $150 to Apple Computers and since then Sequoia Capital has invested in 1000 companies and most of them have been huge market leaders in their arenas.
The primary reason Sequoia is such a brilliant investor is because instead of looking at the founders, they look at their market. They look into how big is the market for the product and service the company is catering to. They consider the size of the market, market dynamic and competitive aspect. Its aim is always to build big companies. They believe that if they don’t attack a big market; it is highly unlikely to build a big company.
Sequoia has supported firms that today have a share value of $1.4 trillion.
Sequoia invests not only in the United States but in the entire world. If you look at any country’s successful start-ups, chances are Sequoia has funded or been a part of them.
What can the entrepreneurs of the seed stage expect when they pitch sequoia?
Empathy! They have a deep respect for the founder journey — and believe entrepreneurship is an incredible vehicle for change. They want to get as excited about the problem you’re solving as you are. Sequoia aims to dream with you.
Today, Sequoia India has 465 investments out of which 272 are lead investments with a 3 billion fund raised and 49 exits. The Fund supports the high-tech businesses of India like Byjus, Justdial, Ola, OYO, Zomato, Druva, Pine laboratories, etc.
Their recent investments are Lio, an IT start-up receives a seed funding of $2 million; Flobiz, a neo bank for SMB (Small and Medium Business) receives $31 million for Series B in September 2021; Bikayi, digitizing SMBs(Small and Medium Business) receives Series A funding of $10.8million.
Sequoia India has Ashish Agrawal and Harshjit Sethi as Managing Directors on the Venture team. As Managing Directors of the Investing team are Ishaan Mittal, Sakshi Chopra and Tejashwi Sharma.
It currently owns the highest number of companies in the portfolio that have potential to turn into a unicorn in 2023.
Sequoia Capital found its way to India in 2006 with an association with West Bridge partners (home-grown venture capital firm) focused on more Public Market Investments and Growth Capital than early stage deals. In 2011, West Bridge moved out to re-launch West Bridge and Sequoia under current leadership. Slowly after this, they started gearing towards focusing on tech centric companies.
Many times, a case was made that the Indian market is not deep enough to absorb the capital that the company offered. But Sequoia India’s philosophy is to invest and raise large funds in Early Stage Technology Companies over time, palpable to maturity.Over 80% of Sequoia’s Limited Partners are non-profit organizations, such as universities, endowments, charities, and foundations.
The Limited Partners base is permanent, which provides a long-term perspective in thinking and can be observed in the consistent investing approach in India.
Sequoia India found that early start-ups face a lot of problems and to reduce the problems, which is why they came up with a program called Surge.
Surge is a rapidly scale up program designed to provide creators an unfair edge in sizing and growing, make good business model decisions in the beginning and shortly thereafter rise into a Series A category.
India is an exciting market with tremendous opportunities and Sequoia Capital will do whatever it can to provide opportunity and push the start-up culture.
Given India’s place in the world, Sequoia believes that second access, which is being able to build for the world from India, is going to become very interesting over the next five or 10 years.
You can also have a look on other startup stories.