Sequoia to invest $1.35B in Indian and South-East Asian startups


Menlo Park-headquartered venture capital investor Sequoia Capital has received commitments totaling $1.35 billion from limited partners for two new India- and South-East Asia (SEA)-focused funds—a $525-million venture fund, and a $825-million growth fund.

With this fund, Sequoia Capital’s total assets under management for India to an estimated $5.4 Bn, across the seven funds it has raised for investments in India and across Southeast Asia.

The funds will be used to double down on investments in both early- and growth-stage firms in the technology, consumer and healthcare space. “We are excited about the depth of opportunities in this region, which is undergoing a massive technology-led transformation. The startup ecosystem in both India and SEA has come a very long way in the last few years; the market gets deeper and the crop of founders, and their achievements, becomes more impressive each year,” said Shailendra J. Singh, managing director, Sequoia Capital (India) and SEA, in a blog post.

“The combined GDP of India and SEA is expected to cross $14 trillion and the number of mobile internet users will likely cross 1.5 billion by 2030. This region will become home to a number of massive technology companies during the next decade,” he added.

Singh emphasized that from Sequoia’s 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.”

In its last 14 years of investing in India, Sequoia has made over 200 investments in India and Southeast Asia so far. This includes notable names such as Zilingo, Bira, Mu Sigma, Freshworks, Druva, Freecharge, Pine Labs, and JustDial among others. From the sixth fund, its Indian investments include two-wheeler rental startup Bounce, payments aggregator BharatPe, and student housing firm Stanza Living.

Shailendra also highlighted the hard truths that the COVID-19 pandemic has brought to the startup ecosystem where the period of exuberance witnessed an inflow of a large amount of capital, while the down cycles led to cost-cutting and negative sentiment.

He further highlighted that during the period of intense competition, startups struggled to grow rapidly with good unit economics and often posted very high losses. Besides, it also prevented large profitable technology businesses to emerged from the region.

While the market is deepening, India has world-class founders and formidable tech talent, it is time to build more products that can compete globally on quality, not just on price.

“We need more unique and innovative startups, pursuing original ideas in addition to “X of Y” business models. We need more examples of authentic leadership, improvements in gender diversity, and an inclusive, safe, and nurturing work culture for our teams. In short, our ecosystem needs exemplary, enduring, lighthouse companies of the future, that can prosper for decades and be resilient across market cycles,” said Singh.