Sequoia seeking to raise US$7b for new funds as markets reel: source

[SAN FRANCISCO] Sequoia Capital is seeking to raise about US$7 billion for a set of venture funds, according to a person familiar with the situation. The investment vehicles are the latest in a series focused on China, India and the US.

The effort marks a major fundraising push at a time when many investors are taking a cautious stance. The coronavirus pandemic has sent stock markets tumbling and has economists warning of a global recession. Sequoia, a firm with a nearly 50-year track record whose funds are typically oversubscribed, is better suited than many rivals to raise capital in this environment. A spokesman for Sequoia said she couldn't comment on the fundraising plans, which were earlier reported by The Wall Street Journal.

The firm made headlines with its memo earlier this month that coronavirus represents a "black swan" event, meaning an unexpected disruption with widespread financial impact.

"We sent that memo because we wanted to signal to our founders they should take this seriously," said Sequoia partner Alfred Lin in an interview with Bloomberg Television. "We need to focus on survival. For many of our founders, that means focusing on their cash flow and understanding how much cash they have to get to the other side."

Sometimes downturns can incubate success. Around the time of the Great Recession more than a decade ago, Sequoia invested in several startups that grew to be worth billions of dollars, including Airbnb Inc and Dropbox Inc. Similarly, the current economic tumult doesn't signal an end to dealmaking, Mr Lin said.

"I think a lot of funds have plenty of cash to invest," he said. "We are open for business. If you fundamentally have a good business, I believe you will get funded."

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Two years ago, Sequoia raised more than US$6 billion for a separate global growth fund.

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