Sequoia Capital Looks To Raise Second India-Focused Seed Fund

Silicon Valley-based early-stage investor Sequoia Capital is in the market to raise its second India-focused seed fund, according to the company’s filings with the US Securities and Exchange Commission. It has not yet disclosed the timeline or the fund size it is looking to raise.

Sequoia is currently the most active investor in the Indian startup ecosystem, with its portfolio spreading across 245+ companies. It is also the leading investor in Indian unicorns like BYJU’S, OYO, Ola, Zomato, BlackBuck, Pine Labs, Grofers, Car24, Dailyhunt, Druva, and Freshworks.

The company had announced the final close of its first India-focused Seed Fund-I, in October 2019, at $200 Mn. The company has used the fund to invest in some of the prominent startups across stages — early, growth and late.

Overall, Sequoia India has floated about seven funds for Indian startups, with plans to raise $1.25 Bn. The company has closed its sixth fund at $695 Mn in August 2018 to invest in early- as well as growth-stage companies across technology, consumer and healthcare sectors in India and Southeast Asia.

The company also runs a startup accelerator programme Surge for early-stage startups from India and other Southeast Asian regions working in varied sectors — consumer internet, deep tech, enterprise software, healthcare technology, fintech, crypto and direct-to-consumer brands.

The VC firm shortlists 15 to 20 startups for each cohort and provides a capital investment of $1 Mn to $2 Mn with participation from other investors. At the end of the five-week-programme, Sequoia also conducts an investor week called UpSurge for startups in the cohort. The VC firm invites early-stage investors, angel investors, seed funds and other VCs to invest in the companies.

The programme has mentored some of the prominent startups in the Indian ecosystem, including Classplus, Trell, Khatabook, Juno, Klub, Log9 Materials, Rheo TV, Bijak and others.

Surge took the onus of identifying hot new startups and bringing them to the public eye with its big brand name attached, however, an Inc42 report noted that the trend is true only at a macro level.

According to an Inc42 Plus story — Sequoia Surge Banks On Repeat Founder Formula For Early Stage Bets, more than 50% of Surge’s Indian portfolio has been founded by repeat founders. But according to Surge, it has 34 repeat founders in 16 startups, including 5 founders from two stealth mode startups. It emphasised that the majority of the founders are starting up for the first time.

The likes of Bulbul TV (Surge 01), Seekify (Surge 02), Convosight (Surge 03) all have founders that had floated startups in the past. Some of the Surge startups have founders who have founded more than one startup before their current venture. For instance, BulbulTV cofounder Sachin Bhatia cofounded MakeMyTrip and then launched TrulyMadly in 2013, which he exited in 2018. While Bhatia’s MakeMyTrip has raised funds from Naspers, Ctrip etc, it went on to be listed on NASDAQ. In case of TrulyMadly, the investors include Helion Venture Partners, Kae Capital among others.