Jan 21, 2020

Sequoia Capital's peacetime war chest

Photo: Smith Collection/Gado/Getty Images

Sequoia Capital two years ago made a decision that stunned many of its VC peers and limited partners: It would raise a whopping $8 billion for its third global growth fund, in an effort to defend both itself and its portfolio companies from SoftBank Vision Fund.

The plan: Sequoia still wouldn’t have SoftBank’s aggregate firepower, but it would have enough to compete for follow-on deals within its own portfolio, and to fund pro rata checks in SoftBank-led deals.

  • The reality: SoftBank so far hasn't managed to raise a second Vision Fund.

A source close to the situation says that Sequoia Global Growth III is only a month or two behind its expected investment pace, with the bigger change being that it's written a larger number of (relatively) smaller-sized checks.

  • Sequoia also is said to believe that the iPhone-born "online-to-online" revolution is mostly tapped out, save for some remaining opportunities in China, meaning the unicorn funding race would look different even if SoftBank pulls a rabbit out of the Saudis' hat.
  • Sequoia also happens to be in market with its regular series of funds (i.e., early-stage venture, etc.).

The bottom line: Sequoia in 2018 looked like it was bringing a knife to a gun-fight. In 2020, bullets are overrated.

Go deeper: The complicated future of SoftBank Vision Fund

Go deeper

Activist investor Elliott Management knocks on SoftBank's gates

Photo Illustration: Sarah Grillo/Axios. Photo: David A. Grogan/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images

Activist investor Elliott Management has acquired around a $2.5 billion stake in SoftBank Group, saying the market "significantly undervalues" the Japanese group's assets.

The state of play: So far the relationship appears to be friendly, but Elliott isn't shy about getting into the mud if that's where it feels the most profit lies.

Inside the fall of SoftBank-backed startup Brandless

Illustration: Aïda Amer/Axios

Brandless, the SoftBank-backed e-commerce startup that originally sold all of its products for $3, confirmed yesterday that it will shut down.

Behind the scenes: Sources say Brandless had sought a buyer, via a bank-led process, but was unable to garner any bids.

Peter Thiel's Founders Fund isn't really Peter Thiel's Founders Fund

Illustration: Photo Illustration: Eniola Odetunde/Axios. Photos: Charles Eshelman, Steve Jennings, and Chip Somodevilla/Getty Images

Founders Fund has raised $3 billion for a pair of new funds, so expect a slew of headlines about how "Peter Thiel's venture capital firm" is now flush with cash.

Behind the scenes: Thiel is essential to Founders Fund, but he's not autocratic. Instead, Axios has learned that he's one of three people with veto power over most FF investments, and is unable to do a deal without approval of the other two.