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Sequoia Capital China aims to raise $9 billion despite Beijing’s tech crackdown


Sequoia Capital China is about to raise nearly $9 billion to invest in Chinese startups, despite global investors’ concerns about Beijing’s zero-Covid policies, a crackdown to technology corporations and increased geopolitical risks.

The fundraising, which two people familiar with the matter put out between $8 billion and $9 billion in four separate funds, will allow China’s top venture capital group to pour fresh money into companies. Startups are hungry for cash.

Global investors have largely retreated from Chinese funds over the past year because of regulatory concerns, after a protracted regulatory crackdown by Beijing burned the valuations of public corporations. listing technology and many pauses Initial public offering in Hong Kong and New York.

Sequoia China plans to close the round this week, one of the people said, adding that it was 50% oversubscribed.

A Beijing-based investor said that while many sovereign wealth funds, US university endowments and pension funds have halted investments in China this year, hedge funds The largest and most extensive investments such as Sequoia China and Hillhouse are still raising money.

“Only Sequoia and Hillhouse can raise money from international investors right now, they consider it lower risk, like investing in an index fund,” the person said.

At the top of the range, the money brought in by Sequoia China would amount to almost 170% of the total raised in the first half of this year by all China-focused private equity and venture capital groups, according to data from Preqin supplier industry information.

There is a high risk in China. Pouring money into venture funds like Sequoia China requires investors to lock in their capital for five to 10 years or longer in an increasingly volatile geopolitical environment.

Russia’s invasion of Ukraine has raised concerns that investments in Chinese startups could be affected by the close relationship between Moscow and Beijing.

As a result, China-focused funds have struggled to convince global investors to buy in this year, raising only $4.8 billion in the first six months of 2022, according to preliminary data. from Preqin. That total is down about 94% year-on-year and marks the lowest level in half a year since 2009 during the global financial crisis.

Led by former businessman and banker Neil ShenSequoia China is an arm of Silicon Valley-based Sequoia Capital and has backed many of the country’s biggest tech companies, including TikTok owner ByteDance, e-commerce firm Pinduoduo and consortium delivery Meituan.

The four new Sequoia funds will invest in Chinese startups at different stages of their lifecycle. News of the fundraising was first reported by The Information.



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