Sequoia Capital is returning to its roots, announcing this morning that its China and India affiliates each will become independent entities.

Why it matters: Sequoia is one of the world's oldest venture capital firms, and arguably its most successful.

Backstory: The firm was founded over 50 years ago in Silicon Valley, backing such companies as Apple, and made its first international foray with an Israeli fund during the dotcom boom.

• Sequoia Israel was ultimately discontinued, but the firm entered China in 2005 and the next year launched in India via the purchase and integration of a local firm called Westbridge Capital Partners. In 2020, Sequoia put its first partner on the ground in Europe.
• The China and India efforts were quasi-independent and led by homegrown investors, reflecting the hard lessons other Silicon Valley firms had learned from failed experiments of relocating U.S. partners overseas.
• Sequoia's structure was successful, but eventually led to some portfolio conflicts, strategy differences and non-U.S. teams thirsting to be truly independent. Not surprisingly, neither Sequoia China nor India were part of the parent firm's giant portfolio reorganization in late 2021.
• Also playing a factor in the split decision were rising geopolitical tensions between the U.S. and China, although that appears to have been more of a contributing factor than a primary driver.

Details: The decoupling, or detripling as it were, is expected to be completed by March 31, 2024.

• The U.S. and Europe business will retain the Sequoia Capital brand, while Sequoia Capital China will be rebranded as HongShan and the Sequoia India business as Peak XV Partners.

Behind the scenes: My understanding is that Sequoia partners have long made personal investments in Sequoia funds outside of their own region, such as a Menlo Park-based investor participating in a Sequoia China fund (via a side vehicle that also includes founders, friends and family). Such legacy investments will be retained, but no new ones will be made going forward.

• Moreover, word is that all Sequoia partners also have an opportunity to share in a portion of carry from affiliate funds, via a structure more similar to a flow than to a stock. Once that gets trued up to net zero, that profit-sharing will end.
• Once the split is completed, none of the newly independent firms will have any geographic investment restrictions outside of what might be contained in limited partner agreements.

The bottom line: Sequoia may have grown a bit too big for its branches.

The SEC yesterday sued Binance, the world's largest crypto exchange, and this morning sued Coinbase (Nasdaq: COIN), the largest U.S. crypto exchange.

Why it's the BFD: U.S. securities regulators are declaring war on crypto, and some venture capital firms should be sweating.

• None are named as defendants, but many have exposure to these two companies and many more enabled sales of unregistered tokens that the SEC now seems likely to deem securities.

Details: Binance and its CEO Changpeng "CZ" Zhao were charged in a 136-page complaint with alleged market manipulation, securities law violations and fraud. Coinbase was charged in a 101-page complaint with "failing to register the offer and sale of its crypto asset staking-as-a-service program."

Cap table: Binance has only disclosed around $20 million in venture funding, but its U.S. arm — which the SEC claims was surreptitiously controlled by its nondomiciled parent — raised over $200 million at a $4.5 billion valuation in a 2022 seed round led by Foundation Capital (which declined comment).

• Binance subsequently announced a $500 million VC arm of its own.
• Coinbase still counts some of its VC backers, including Paradigm and a16z, among its shareholders, and its board of directors includes venture capitalists Fred Wilson (USV), Marc Andreessen (a16z) and Katie Haun (Haun Ventures).

Also yesterday: Draft legislation was released by two House committees, seeking to create a regulatory framework for digital assets to be issued and traded in the U.S.

The bottom line: "The crypto crackdown started in earnest in January, with government officials issuing statements and guidelines about the risks digital assets posed to investor portfolios, and to the U.S. banking system at large." — Crystal Kim, Axios Crypto

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🌎 Charm Industrial, an SF-based carbon removal startup, raised $100m in Series B funding. General Catalyst led, and was joined by Lowercarbon, Exor Ventures, Kinnevik, Thrive Capital and Elad Gil. https://axios.link/45QuV7W

• Curri, a Ventura, Calif.-based logistics platform for the construction industry, raised $42m in Series B funding. Bessemer Venture Partners led, and was joined by Initialized Capital, Brick & Mortar Ventures and Rainfall Ventures. https://axios.link/43O1XEd

🚑 Axuall, a Cleveland-based provider of clinical workforce tools, raised $20m in Series B funding. Noro-Moseley Partners led, and was joined by Flare Capital Partners, Intermountain Ventures, University Hospitals Ventures, Hartford HealthCare, LocumTenens.com, Epsilon Health Investors, InHealth Ventures, AV8 Ventures, JumpStart Ventures and M25 Ventures. www.axuall.com

• Sourcemap, a New York-based supply chain monitoring startup, raised $20m co-led by Energize Ventures and E14 Fund, per Axios Pro. https://axios.link/3oMUvtV

⚡ Amogy, a Brooklyn, N.Y.-based developer of ammonia-based fuels for trucks and ships, raised $11m in new Series B funding (round total now $150m) from Marunouchi Climate Tech Growth Fund, Mitsubishi Corp., Mitsubishi Heavy Industries America and Synergy Marine. https://axios.link/3NcZXQ5

• Togai, a B2B SaaS metering and pricing platform, raised $3.1m in seed funding. Together Fund led, and was joined by BoldCap and Core91. www.togai.com

• Keep Aware, an Austin, Texas-based browser security startup, raised $2.4m. LiveOak Venture Partners led, and was joined by Runtime Ventures. www.keepaware.com

• Candy Funhouse, a Canadian candy company received an investment from NBA star Giannis Antetokounmpo's Ante Capital, per Axios Pro. https://axios.link/3OSxJLW

• Ahead, a Chicago-based portfolio company of Berkshire Partners, acquired MBX Systems, a Libertyville, Ill.-based integrator of custom hardware systems and supply chain orchestration software. www.ahead.com

• Bed Bath & Beyond, which filed for bankruptcy in April, is in talks to sell its Buybuy Baby chain to brand investment firm Go Global Retail, per the WSJ. https://axios.link/3WTkSLn

⚡ CES Power, a Memphis, Tenn.-based portfolio company of Allied Industrial Partners, acquired Immedia, a Cherry Valley, Mass.-based provider of power and HVAC solutions for events. www.cespower.com

• Cava, a Washington, D.C.-based fast-casual Mediterranean restaurant chain with over 250 locations, formally set IPO terms to 14.44m shares at $17-$19. It would have a market cap just north of $2.1b, were it to price at the top of its range. https://axios.link/3IY38bW

• Fat Brands (Nasdaq: FAT) plans to spin off its Twin Peaks sports bar chain via an IPO. https://axios.link/3OSkUkN

• Surf Air Mobility, an LA-based regional business travel carrier that uses electric aircraft, filed for a direct listing on the NYSE. The company has raised nearly $100m from firms like Anthem Venture Partners and ff Venture Capital, and previously considered a SPAC merger. https://axios.link/3Nb1hD8

🚑 CERo Therapeutics, a South SF-based developer of T-cell therapies that raised over $40m in VC funding, agreed to go public at an implied $145m valuation via Phoenix Biotech Acquisition Corp. (Nasdaq: PBAX). https://axios.link/43LIHqC

• Brightflow AI, a VC-backed maker of cash flow analysis software for small businesses acquired CircleUp, a crowdfunding platform backed by such firms as Union Square Ventures, TPG, Temasek and Rose Park Advisors. www.brightflow.ai

⚡ Industrial Growth Partners sold ASPEQ Hearing Group, a St. Louis-based provider of electric heating and thermal management products, to SPX Technologies (NYSE: SPXC) for $418m in cash. www.aspeqheating.com

• Associated British Foods (LSE: ABF), owner of Primark, agreed to buy British dairy tech company National Milk Records for £48m. https://axios.link/3WU0OZa

• Raytheon is in talks to sell its flight controls business to Safran (Paris: SAF) for around $1b, per Bloomberg. https://axios.link/3P2S6Gt

⚡ Shell (NYSE: SHEL) is seeking a buyer for its residential energy supply unit. https://axios.link/3WPOtp0

• Standard Chartered (LSE: STAN) is in talks to sell its aviation finance unit for €3.5b to AviLease, a jet lessor owned by Saudi Arabia's Public Investment Fund, per Bloomberg. https://axios.link/42jr4O1

🚑 Symrise of Germany offered to buy Swedencare, a Stockholm-listed pet health care firm in which Symrise recently acquired nearly a 30% stake, at around a $544m enterprise value (11% discount to recent trades). https://axios.link/3qraz5g

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• HPS Investment Partners raised $7.3b for its second senior direct-lending fund. https://axios.link/42qFLyN

• Industry Ventures is raising $1b for its 10th VC secondaries fund, per a public pension document. https://axios.link/43uydMH

• Julius Baer Group is raising $250m from clients for its latest private equity fund, per Bloomberg. https://axios.link/3IZvmmD

• Nexa Equity, an SF-based PE firm focused on lower midmarket application software and fintech companies, raised $180m for its debut fund. It also secured $150m for "deal-specific co-investment vehicles." www.nexaequity.com

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• Joe Bubniak joined cybersecurity-focused VC firm NightDragon as VP of corp dev and partnerships. He previously was a tech banker at JPMorgan. www.nightdragon.com

• Matthew Flynn (ex-Campbell Lutyens) and Hudson Collins (Eaton Partners) joined William Blair’s private capital advisory group as a managing director and director, respectively. www.williamblair.com

• Steven Markovich resigned as head of software investment banking at Barclays to join Centerview Partners, per Reuters. https://axios.link/3oFfoYc

🚑 Suraj Tolani left Moelis & Co. to join JPMorgan Chase as a managing director focused on midmarket health care services companies, per Bloomberg. https://axios.link/45ILAup

• Electric Capital, an SF-based crypto VC firm, promoted Ken Deeter and Maria Shen to general partners. www.electriccapital.com

• GV promoted Brendan Bulik-Sullivan, Crystal Huang, Frederique Dame and Issi Rozen to general partners. www.gv.com