Sequoia Capital Seeks Up to $1.5 Billion for China Funds

  • Firm is raising two funds to back Chinese tech startups
  • The fundraising could be the largest yet for Sequoia China

Sequoia Capital is looking to raise as much as $1.45 billion for a pair of funds to invest in Chinese technology startups, according to people familiar with the matter.

The Silicon Valley venture capital firm expects to close the China funds by April 7, said the people, who asked not to be identified because the funds haven’t closed yet. If the targets are met, it would be the largest fundraising for Sequoia Capital China, a decade-old division of the firm.

Sequoia China was started in 2005 by Neil Shen, a founder of online travel company International Ltd. The venture firm bought early stakes in tech companies that have since gone public, including Qihoo 360 Technology Co. and Vipshop Holdings Ltd. Sequoia is also a backer of SZ DJI Technology Co., the world’s biggest maker of consumer drones.

The latest fundraising takes place amid uncertainty in the Chinese economy, a decline in venture capital raised by U.S. firms and a sex scandal facing a Sequoia partner who departed the Menlo Park, California, firm this month. A former exotic dancer sued Mike Goguen, a partner at Sequoia for almost two decades, alleging he had broken a contract to pay her $40 million to settle claims he abused her during the course of a 13-year relationship. Goguen filed a countersuit claiming the relationship was consensual and that his former mistress’s suit amounts to extortion.

For the new China funds, the venture firm is seeking $500 million to $550 million for Sequoia China Venture Fund VI LP and $850 million to $900 million for Sequoia China Growth Fund IV LP, the people familiar with the matter said. Sequoia declined to comment.

Last year, Sequoia closed a $625 million China growth fund. In 2014, it raised a $450 million China venture fund. Investors in both of those funds include the University of Michigan, the Andrew W. Mellon Foundation, the Bush Foundation and BP Plc, according to data compiled by Bloomberg.

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