Sequoia Capital is one of the strongest brands in technology investments. The venture capital firm decided to separate its Chinese and American businesses. Silicon Valley, which has invested in startups including owner of social media platform TikTok, summed up the symbiotic relationship between tech investors on both sides of the Pacific Ocean. But the deterioration of relations between Washington and Beijing casts a shadow over the joint business between the United States and China. Sequoia told investors on Tuesday that it will split into three independent companies in the United States, India and China by March 2024.
Managing a decentralized global investment business is becoming more and more complex
Sequoia Books for Investors. The memo cited several business reasons, but did not directly address geopolitical concerns.
However, the Wall Street Journal reports that national security officials in the United States are concerned about the two-way flow of money and information between technology companies and their investors. the
In recent months, the Biden administration has created an executive order
That bans certain investments in China and other geopolitical rival countries, and targets US private equity and venture capital investments in advanced technologies that US officials believe pose a national security risk, the exchange reported.
The new regulation limits future investments in quantum computing and advanced semiconductor companies, while requiring disclosure of investments in older semiconductor technologies. The government has debated how investment in artificial intelligence might be included in the plan, though
Officials still struggle to identify which forms of artificial intelligence pose a national security risk.
Meanwhile, Beijing, for example, has banned the use of chips manufactured by the US company Micron.
Founded half a century ago, Sequoia was one of the first to invest in companies like Apple, Google or Airbnb. Sequoia
It started its Chinese business in 2005,
Food supplier Meituan and e-commerce marketplace Pinduoduo were its first investments. Sequoia China currently manages $56 billion in assets, and half of its investors are Americans. In recent years, the Chinese and Indian operations have been separated. In 2021, Sequoia announced a shift in strategy in the US and Europe that gave local management more freedom of action. But the Chinese and Indian branches have not yet achieved similar independence.
After separation
The three independent units eliminate the sharing of back office functions
in Information Technology, Finance and Accounting.
Last year Sequoia was tough, as valuations plummeted for tech and startups wiping out billions of dollars in gains in its investment funds, while the company was also forced to roll over money invested in failed cryptocurrency exchange FTX. So they apologized to the investors.
according to plans
The venture capital business in the US and Europe is still called Sequoia Capital.
Sequoia China changes its English name to HongShan. While in India and Southeast Asia, the company will be known as Peak XV Partners, a reference to Mount Everest.
