Topics
late
AI
Amazon
Image Credits:Smith Collection / Gado / Getty Images
Apps
Biotech & Health
Climate
Image Credits:Smith Collection / Gado / Getty Images
Cloud Computing
Commerce
Crypto
initiative
EVs
Fintech
fund-raise
contrivance
Gaming
Government & Policy
Hardware
Layoffs
Media & Entertainment
Meta
Microsoft
Privacy
Robotics
security system
Social
distance
inauguration
TikTok
Transportation
Venture
More from TechCrunch
event
Startup Battlefield
StrictlyVC
Podcasts
TV
Partner Content
TechCrunch Brand Studio
Crunchboard
get through Us
One of Silicon Valley ’s most prominent investing firms will face government activity scrutiny over its investment in China . Sequoia Capital has receive a polite but pointed request from Congress to enter into more detail on how it will prevent further U.S. investiture dollars from advancing Formosan interest .
Sequoia announce in June that it would be splitting into three pieces : Sequoia Capital in the U.S. and Europe , Peak XV Partners in India and Southeast Asia , and HongShan in China ( formerly Sequoia Capital China ) . While the company claimed to be doing so due to it being “ increasingly complex to run a decentralized global investment business , ” it seemed clear to all that it was in anticipation of a legal demand to undress from sealed communication channel of business in the rival superpower .
The Select Committee on the Chinese Communist Party , led by Mike Gallagher ( R - WI ) , would care further sureness that Sequoia is in fact break up , and whether that is sufficient to prevent — as is now require following a recentExecutive club — U.S. dollars from ending up fund Chinese efforts in quantum computing , semiconductors , AI , and other important technical school sectors .
The alphabetic character , which can be read here , sent to Sequoia calls the split “ a step in the correct focal point , ” but lend :
Although Sequoia ’s schism appears to purpose some of the concerns detailed above by curtailing the flow in some fount of U.S. managerial and technological expertise to tough PRC companies , significant interrogative sentence stay . . .
Those questions are , first , whether the split could potentially and paradoxically intensify investment in the taboo industry by grant HongShan to act without the showing and oversight of its U.S. counterpart . And second , whether HongShan might intensify its investments in U.S. startup for similar reasons .
The letter from the committee expect Sequoia to list all companies it has invested in that are found or have significant operations in China , along with legion details like ownership , Chinese politics pastime , determination - urinate processes and so on .
Join us at TechCrunch Sessions: AI
Exhibit at TechCrunch Sessions: AI
It also ask for more information on the reported 50 % of Sequoia Capital China determine partners who are based in the U.S. and how they have invested .
in conclusion , it asks how Sequoia would answer if the U.S. put one of Sequoia ’s portfolio companies on a sanction or trade confinement listing .
It ’s potential that some of the information asked for may be confidential , in flux , or but unknown ( in particular the last question , which concern a suppositional ) . Nevertheless , the committee steer Sequoia to answer by November 1 .
The pivot
Sequoia Capital China had already significantly scaled back its capital deployment in the nation before it part from its U.S. mothership . The house raised awhopping $ 9 billionin July 2022 for its China monetary resource cover all stages but recorded just 62 sight between Q3 2022 and Q2 2023 , compare to 177 hatful between Q3 2021 and Q2 2022 , according to data fromCrunchbase .
Geopolitics might have played a role in the house ’s slow down dealmaking in China , but the dramatic bead is not that surprising after all devote that venture investiture in China overall have been inert succeed three old age of tech crackdown . Some of the leading U.S. venture Das Kapital business firm focused on China have paradoxically shifted their attention to overseas marketplace , especially the U.S. , where they witness a happy marriage with Chinese founder targeting American users .
The U.S. government ’s letter , however , does get up question over the viability of Sequoia ’s — and other similar global VC firms ’ — decoupling strategy .
GGV Capital , which also has had a prolific two decades of back China ’s internet upstarts , recently split into two branch , a U.S. subdivision and an Asiatic one that includes its China surgery . The announcement of its shakeup came three month after a U.S. congressional committeeinitiated a probeinto four American investiture finances — GGV Capital , GSR Ventures , Walden International and Qualcomm Ventures — over their funding for Chinese tech companies in sensitive areas .
It stay to be seen how these venture capitalist stuck between the two superpower ’ tech arms subspecies continue to find resolutions .
redwood carve up China and India weaponry from US mothership to void ‘ portfolio battle ’ and ‘ marketplace confusion ’
