Sequoia Capital certainly made headlines Tuesday by breaking up with China. But VC firms had already been growing wary of China as funding levels continue to fall.
On Tuesday Sequoia announced in a letter to their limited partners that the firm is going to break off its China and India units into separate entities—with the China entity, launched in 2005, taking on the name HongShan in English and India and Southeast Asia together becoming Peak XV Partners. The U.S. and Europe will remain under Sequoia Capital, but the three will become different brands by March of 2024 at the latest; profit sharing and centralized back-office functions, meanwhile, will cease by the end of this year, a person familiar with the plans confirmed. Sequoia declared the big catalysts for the move included conflicts between portfolio companies among the different entities and difficulties with centralized back-office functions.
