Sequoia India is raising $200 Mn separate fund to write early stage cheques

In what appears to be Sequoia Capital first attempt to start seed fund to place bets on early-stage ventures in India, the venture capital firm is in talks to raise a separate fund of around $200 million.

Sequoia India, for this, has reached to a few partners to pitch for raising an independent fund, said an ET report quoting people close to the development. On Tuesday, Sequoia India had appointed Google India and South East Asia's head Rajan Anandan as Managing Director.

Anandan will be the seventh MD in Sequoia. He will focus on developing Surge, a rapid scale-up program for startups in India and Southeast Asia, and act as an investment advisor and mentor to the program’s founders.

With Anandan, who has also been a prolific angel investor, joining venture capital firm, it will make things easier for Sequoia to raise early-stage separate fund, added the report. Surge will swell up its allocation up to $900 million for India and Southeast Asia.

In 2018, Sequoia India closed its sixth India fund, racking up $695 million. So far, Sequoia India has raised a total of $1.5B across 3 funds. The deal if materialised will escalate the already competitive domestic market for early-stage deals.

Presently, there are about a dozen VC firms such as India Quotient, Blume Ventures, IAN Fund, Kae Capital, Stellaris VC  and Orios Venture Partners that solely focus on making seed investment.  Kalaari Capital also had launched KStart for seed-stage investments.

Launched in January, Surge pick up 20-30 companies a year, in two cohorts. Recently, AngelList had announced a dedicated fund - The Collective - for early-stage deals. It plans to back 60-80 companies over the next one-and-half-year.

Surge's mentors include accomplished founders and technology executives like Byju Raveendran, Freshwork’s Girish Mathrubootham, Mad Street Den’s Ashwini Asokan, Uber’s Amit Jain, WhatsApp’s Neeraj Arora, and Zomato’s Deepinder Goyal and OYO's Ritesh Agarwal among several others.

Last year, Sequoia Capital had closed on a $180 million for a new fund called Sequoia Scout III that’s focused exclusively on seed-stage opportunities in the US. Two months later, it also started a seed-stage fund in China.