Sequoia China may downsize investment staff amidst tech sector slowdown: Report

Sequoia Capital China is laying off some of its investment staff in response to a slowdown in growth in the country’s technology sector, Reuters reported today. 

Sequoia China, which has its headquarters in Beijing, employs 70-odd investment professionals and the firm may cut its headcount by 10-20%, the report said. 

In a statement to the publication, Sequoia initially said it frequently reviews its workforce and that in the last 12 months the total number of employees had increased slightly with the induction of 13 investment professionals. In a later statement to Reuters, the firm denied the layoffs.

The layoffs, the report added, follow a government campaign against debt financing that has shrunk the available capital pool for startups. In addition, investors have been somewhat disappointed with the returns delivered by companies going public amid market volatility. As a result, investors have turned bearish on committing fresh capital, the report said.

China’s venture capital and private equity managers raised a total of $1.5 billion for investment across all sectors in the first three months of 2019, according to data compiled by London-based research firm Preqin.

Sequoia has lately become extremely active with investments in India and Southeast Asia, especially across the technology sector. The firm recently launched its first startup incubator programme Surge. The programme aims to incubate 10 to 20 early-stage startups in two cohorts in a year and invest $1.5 million (Rs 10.6 crore) in each of them. The programme will invest in startups in India and Southeast Asia across sectors such as consumer internet, enterprise software, healthcare technology, fintech, cryptocurrency and direct-to-consumer brands.

Last month, Google’s Southeast Asia and India chief Rajan Anandan left the search giant and joined Sequoia Capital India as a managing director to focus on Surge. 

According to TechCircle’s research, in April, Sequoia Capital India emerged as the most active investor with seven technology startup deals.

The firm, however, did witness some key executives quitting the company last year. Managing directors Abhay Pandey and VT Bharadwaj moved on to start their own venture capital firm A91 Ventures. Sequoia has invested in more than 130 startups in India including unicorns such as ride-hailing platform Ola, data analytics firm MuSigma and restaurant search and food delivery platform Zomato. It had last year split its investment teams under venture and growth as part of strategy that it follows in the US and China.

In August last year, the firm closed its sixth India fund at $695 million to invest here and in Southeast Asia. The new fund will invest in the technology, consumer and healthcare sectors. Sequoia India managing director Shailendra Singh leads investments for the firm in Southeast Asia out of its Singapore offices.

In August, the firm also announced key promotions. Abheek Anand, who joined the firm from Facebook, was promoted to managing director. Anand will focus on investments in Southeast Asia, the firm had said.