Sequoia Raises $950M for Early-Stage Startups

Sequoia Capital has launched two new funds totaling $950 million, reinforcing its commitment to early-stage investing even as market speculation around artificial intelligence intensifies. The venture capital giant remains focused on identifying visionary founders at the inception of their journey, aiming to build enduring companies regardless of economic cycles.

Bogomil Balkansky, a partner on Sequoia’s early-stage team, emphasized the firm’s steady philosophy. “Market conditions fluctuate, but our strategy does not,” he noted. “We continuously search for exceptional entrepreneurs with the potential to create businesses that last for generations.” This disciplined outlook accompanies the introduction of a $750 million early-stage fund aimed at Series A rounds and a $200 million seed fund. Both closely mirror the size of funds raised roughly three years ago.

This announcement follows a period of notable transition and difficulty for the firm. In 2021, Sequoia restructured its operations, shifting to an evergreen core fund supplemented by specialized sub-funds. This change was designed to allow the firm to maintain equity in companies well beyond their initial public offerings. However, Sequoia faced substantial financial setbacks in late 2022, including a loss exceeding $200 million from its investment in the collapsed cryptocurrency exchange FTX. The following year, the firm parted ways with its independent operations in India and China.

Now, the investor behind legendary companies like Airbnb, Google, Nvidia, and Stripe is refocusing on its foundational mission: backing promising founders from the very beginning. Balkansky elaborated, “Our goal has always been to find these founders as early as we can, then work closely alongside them throughout their entire company-building process.”

With AI startup valuations climbing rapidly, Sequoia intends to use these new funds to engage with founders at the earliest phases. This method enables the firm to enter at favorable valuations while acquiring meaningful ownership positions.

That early-stage emphasis has grown increasingly vital. As prices in the tech sector rise quickly, securing an early entry is essential for obtaining a lower cost basis and a more influential stake. This tactic is already yielding results. Sequoia’s seed and Series A investments in companies such as Clay, Harvey, n8n, Sierra, and Temporal have multiplied in value during the AI expansion.

Despite its celebrated history with Series A financing, Balkansky stressed that Sequoia is determined to invest even sooner. “We have a strong tradition of partnering with companies at the earliest conceivable stage, what many now refer to as pre-seed,” he said.

The firm’s early conviction is evident in recent deals. Sequoia provided the first institutional capital to security testing platform Xbow, AI reliability specialist Traversal, and DeepSeek competitor Reflection AI. Each of these startups has since raised substantial follow-on funding at significantly higher valuations. Behind the scenes, Sequoia has actively supported its portfolio, helping Xbow recruit a former Databricks chief revenue officer to its board, introducing Traversal to more than thirty potential enterprise clients, and facilitating a meeting between Reflection AI and Nvidia CEO Jensen Huang that led to a $500 million investment from the semiconductor leader.

Through these efforts, Sequoia remains dedicated to preserving its five-decade reputation as a premier Silicon Valley investor. To keep this mindset front and center, the firm’s redesigned headquarters includes a wall where every investor has handwritten the same reminder: “We are only as good as our next investment.”

(Source: TechCrunch)