Sequoia - Working With Markets And Not People

Sarika Anand Sarika Anand
Nov 24, 2020 7 min read
Sequoia - Working With Markets  And Not People

Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by the organization it is based on.

Sequoia Capital is an American venture capital firm. The firm is headquartered in Menlo Park, California and mainly focuses on the technology industry. It has backed companies that now control $1.4 trillion of combined stock market value.

Sequoia focuses on energy, financial, enterprise, healthcare, internet, and mobile startups.

Sequoia -  Company Highlights

Startup Name Sequoia Capital Operations
Headquarters Menlo Park, California, U.S
Industry Venture capital
Founders Don Valentine
Founded 1972
CEO Sir Michael Jonathan Moritz

Sequoia - About and How it Works?
Sequoia - Logo and its meaning
Sequoia - Founder and History
Sequoia - Mission
Sequoia - Recent News
Sequoia - Business Model
Sequoia - Investments
Sequoia - Acquisitions
Sequoia - Competitors
Sequoia - Challenges Faced
Sequoia - Future Plans

Sequoia - About and How it Works?

Sequoia Capital(American venture) is a private equity and venture capital firm, specializing in incubation, seed, start-up, early, growth, emerging growth, mature, mid-venture, late-venture and PIPE investments in private and public companies in fintech sector. The Firm seeks to invest in all sectors with a focus on energy, financial, healthcare, Internet, mobile, outsourcing, and technology.

Sequoia works with markets not people. Sequoia does not seek to create new markets but to invest in existing markets early. Therefore, they focus on market size and dynamics associated with an idea, rather than focusing on a founder's credentials.

Sequoia - Logo and its meaning

Sequoia Capital logo is its name written in block letters and a green symbol next to it which symbolizes "organic" or "natural".

Logo of Sequoia Capitals
Logo of Sequoia Capitals

Sequoia - Founder and History

Sequoia was founded by Don Valentine in 1972 in Menlo Park, California.

In the mid-1990s, Valentine gave control of the company to Doug Leone and Michael Moritz. In 1999, Sequoia expanded its operations to Israel. Sequoia Capital China was established in 2005 as an affiliate to the U.S. firm. In 2006, Sequoia Capital acquired Westbridge Capital Partners, an Indian venture capital firm. It later was renamed Sequoia Capital India. CB Insights recognized Sequoia Capital as the number one venture capital firm in 2013. The U.S. firm had 11 partners as of 2016.

In 2015, Sequoia chairman Michael Moritz was questioned about Sequoia's lack of any women investing partners. Moritz argued that there were few qualified female candidates, because American women "tend to elect not to study the sciences when they’re 11 or 12", and said that Sequoia would not "lower our standards" to hire women. Following criticism of Moritz's comments, in 2016 Sequoia hired Jess Lee as the first female investing partner in the firm's 44-year history.

In 2020, Sequoia set up its first European office in London, UK and hired Luciana Lixandru to lead it.

Sequoia - Mission

Sequoia's mission statements is, "Sequoia exists to come through for people who put their trust in us. Our mission, our core values, and our definition of success are all based on helping you get the most out of your investment in people."

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Sequoia - Recent News

  • Venture capital firm and growth equity investor Sequoia Capital has made an early-stage investment in a skincare brand
  • Sequoia leads Series A round in Animall; valuation jumps 7X in 6 months - Animall Technologies Pvt. Ltd, which operates a platform that connects cattle buyers and sellers, has raised Rs 44.5 crore ($6 million) in a Series A funding round led by Sequoia Capital. Sequoia contributed Rs 22 crore in this while early-stage investment firms Omnivore and LetsVenture also put in money, digital media publication Entrackr reported, citing regulatory filings
  • Sequoia Capital, Vertex Ventures join Chinese biotech startup’s $226m series B round - Chinese biotech firm RecBio announced it has raised 1.5 billion yuan (US$226.6 million) in a series B round led by Legend Capital and Lyfe Capital. Sequoia Capital also participated in the fundraise.

Sequoia - Business Model

Focusing predominantly on technology and innovation, Sequoia Capital is a stage agnostic investor that has funded and supported over 1500 companies worldwide. Thanks to Sequoia's financial backing and incubation, these companies now control $1.4 trillion of combined stock market value.

  • Sequoia works with markets not people - Sequoia does not seek to create new markets but to exploit existing markets early. Therefore, they focus on market size and dynamics associated with an idea, rather than focusing on a founder’s credentials.
  • Sequential market identification - By investing systematically, they work out which complementary tools and applications will work alongside initial upcoming technologies and markets, and invest in these.
  • Different not better - Sequoia believes that it pays to be unconventional, so they actively seek out ideas that break the norms to work in more innovative and effective ways to solve upcoming problems.
  • Maximize top performers - Where many venture capital companies only develop short-term incubation relationships, Sequoia has been known to develop long-standing investments that last well over a decade, capitalizing on the growth of top performing companies.
  • Partial funding - Sequoia does not give companies all the funding they need right away, instead opting to partially fund companies in order to monitor founders to see how they fare in running the company from the beginning.
  • Cut businesses that don’t meet expectations - Founder, Don Valentine, estimates that Sequoia has closed around 0.5 of companies that aren’t meeting milestones for success in order to limit damages.
  • Software as a priority - Sequoia’s most recent investments lean toward software more than any other areas, covering SaaS, enterprise software, and platforms for e-commerce and healthcare.
  • US and China lead the way - Most of Sequoia’s current investments are located in the US - predominantly on the West Coast - and in China, with India fast becoming a solid area of investment.

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Sequoia - Investments

Sequoia Capital has made 1,406 investments. Their most recent investment was on Nov 20, 2020, when Observable raised $10.5M.

Date Organization Name Round Amount
Nov 20, 2020 Observable Series A $10.5M
Nov 18, 2020 Tourlane Series C $20M
Nov 17, 2020 Strava Series F $110M
Nov 11, 2020 SentinelOne Series F $267M
Nov 11, 2020 Fishtown Analytics Series B $29.5M
Oct 29, 2020 r2c Series A $13M
Oct 28, 2020 Stairwell Seed Round $4.5M
Oct 27, 2020 Rockset Series B $40M
Oct 27, 2020 StrongDM Series A $17M
Oct 27, 2020 Faire Series E $170M

Sequoia - Acquisitions

Sequoia Capital has acquired FACES Cosmetics on Aug 24, 2017.

Acquiree Name Date Amount About Acquiree
FACES Cosmetics Aug 24, 2017 - FACES Cosmetics, with a proud Canadian heritage spanning over 40 years, offers an exclusive line of makeup, skincare products

Sequoia - Competitors

The top 10 competitors in Sequoia Capital's competitive set are Accel, Inventus Capital Partners, Trinity Ventures, Andreessen Horowitz, GV, KPCB, Greylock Partners, Norwest Venture Partners, Citi Ventures, and Benchmark Capital.

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Sequoia - Challenges Faced

Because of the CoronaVirus pandemic, the company has faced the following challenges:

  • Drop in business activity: The Company has seen their growth rates drop sharply between December and February.
  • Supply chain disruptions. The unprecedented lockdown in China is directly impacting global supply chains. Hardware, direct-to-consumer, and retailing companies may need to find alternative suppliers. Pure software companies are less exposed to supply chain disruptions, but remain at risk due to cascading economic effects.
  • Curtailment of travel and cancelled meetings: Company has banned all “non-essential” travelling.

Sequoia - Future Plans

The Strategic Development team helps Sequoia’s portfolio companies plan and achieve their financial and strategic objectives, including forming strategic partnerships and raising capital and M&A, by fostering relationships with global corporations and financial investors. Sequoia Capital India announced that it has secured $1.35 billion from LPs for two new funds as the storied venture firm looks to ramp up its investments in the world’s second-largest internet market and Southeast Asia.

The two new funds — a $525 million venture fund and a $825 million growth fund — will help the VC firm, which operates in India and Southeast Asia through one arm, more comprehensively serve the startup ecosystem in the region, said Shailendra Singh, a managing director at Sequoia Capital India.

“A fundraise represents a massive responsibility to deliver attractive returns to Sequoia’s Limited Partners, the majority of which are nonprofits, foundations and charities. We do this by partnering with outstanding founders who are building category defining companies,” he said.
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