India's Startup Ecosystem is Among the Most Vibrant in the World: Sequoia's Roelof Botha Due to portfolio conflicts and market turbulence, Sequoia Capital announced last week that its India and China funds would separate and operate independently. Peak XV Partners will be the name of the India operations. The company's management is still the same.
By Sujata Sangwan •
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A week after being split off as a separate entity, Sequoia Capital's Managing Partner Roelof Botha said that Sequoia Capital India and Southeast Asia flourished under the leadership of Shailendra Singh, and independent operations would provide more flexibility to strengthen its presence in India.
The third-largest startup ecosystem in the world, India, is currently among the most active markets in the world, and Botha expressed excitement for Peak XV, the new face of Sequoia Capital India, as they double down on the region. "17 years ago, Sequoia saw an opportunity in India as a promising market for startups and entrepreneurship. Since then, Sequoia India has been instrumental in cultivating the startup ecosystem in the country, which has become one of the most vibrant in the world. I am very excited for Shailendra and the Peak XV team as they continue to double down on the region," he added.
Botha's statement comes after those of Silicon Valley investor and CEO of Social Capital Chamath Palihapitiya, who expressed disbelief at Sequoia's decision to pull out of the Indian market. While Palihapitiya could understand Sequoia's decision to exit China since the country is "largely uninvestable for the next 30-40 years," he "was surprised about why they would allow India to leave."
When Sequoia announced the split, three new units were formed. Sequoia Capital US and Europe is run by Roelof Botha, Peak XV Partners is now operating in India and Southeast Asia under Shailendra Singh, and HongShan is now operating in China under Neil Shen. Singh stated in an interview that the local team was now big enough to venture out on its own and make investments in India, where the ecosystem will be parallel to that of the US in 5-10 years.
"My team and I believe that there will be parallel ecosystems of Indian-owned software, infrastructure, development tools, and cloud computing companies. And it is the main brand conflict we share. We could manage the conflict if there were only one or two deals per year. But if we have to deal with this conflict every week. It's a big issue," Singh had stated while explaining the split. Peak XV has already made a successful first financial exit by selling the remainder of its stock in Go Fashion, the holding company for Go Colours.
Peak XV invested around $10 million in the manufacturer of women's legwear in November 2014, and as of now, it has profited $150 million, representing a 15–16X multiple of the initial investment and an internal rate of return (IRR) of 43%, according to a report. Additionally, Singh had stated that the profit-sharing arrangement between the VC firms will be dissolved, meaning the entire sum would now be given to the revamped Peak XV team.
