Sequoia Capital, one of the world’s largest venture firms, marked up its 2020 flagship US venture fund by 24.6% in the 12 months ended in June, defying expectations for funds that deployed capital at the height of the 2020-2021 tech bull market.
Sequoia Capital US Venture XVII, which opened in 2020 and closed on about $808 million two years later, has been marked up almost 30% in the last two years, according to a PitchBook analysis of a report by the Regents of the University of California, an LP in several Sequoia funds.
Sequoia has undergone a series of major disruptions in the last few years, including changing its leadership from Doug Leone to Roelof Botha in 2022 and splitting off its China and India units in 2023.
Sequoia does not disclose which funds are used to make investments. The firm has invested in leading AI companies, including OpenAI, Glean and Harvey AI.
Sequoia declined to comment on the UC Regents report.
The fund’s markup reflects the dichotomy of venture in 2024: Valuations for fast-growing startups, particularly in AI, are multiplying rapidly, depleting venture funds’ dry powder and driving them back to LPs. At the same time, cash distributions back to LPs are almost nonexistent.
The fund’s TVPI, or the ratio of its initial value to the total value of both its distributions and unrealized gains, rose from 1.13x to 1.34x, which puts the fund between the median and the top quartile, according to PitchBook data. But its DPI, or only realized gains, is slightly below the median.
Sequoia’s US Venture XVII had not distributed any money back to UC Regents as of June 2024, according to the report.
From its other funds, Sequoia distributed $10 billion to its investors in 2023, boosted by exits including Instacart’s IPO.
In addition to its seventeenth US flagship fund, Sequoia marked up six of its US and global venture funds by 11.3% on average between June 2023 and 2024.
In March 2024, Sequoia split off its India and China arms into separate firms: Peak XV Partners and Hongshan. Those funds have seen more modest increases in the last year.
Between June 2022 and 2023, Sequoia marked up 15 funds under its umbrella— including its India and China units— by an average of 9.2%.
Featured image by Smith Collection/Gado
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