Sequoia Capital, the famend Silicon Valley enterprise capital agency that has backed firms like Apple, Google, Dropbox, Airbnb and Stripe, just lately disclosed that it had opened its first workplace in Europe. To employees up, it employed associate Luciana Lixandru away from rival Accel Companions.
Even with out an official European presence, Sequoia has quietly operated within the area for greater than a decade, first investing in Klarna in 2010. Different Europe-founded firms in its portfolio embrace Baaima, CEGX, Charlotte Tilbury, Dashlane, Evervault, FON Wi-fi, Entrance, Graphcore, Mapillary, Metaswitch Networks, n8n, Distant, Skyscanner, Songkick, Tessian, Tourlane, UiPath, Unity and 6Winderkinder (Wunderlist).
But, it’s only now that the VC agency is placing folks on the bottom right here in Europe, beginning with an workplace in London that has a remit to speculate throughout the continent.
Working alongside Lixandru is junior investor George Robson, who joined from Revolut. Most just lately, Sequoia recruited Zoe Jervier Hewitt from EQT as head of expertise in Europe. And at last, Matt Miller, a Sequoia U.S. veteran, can be a part of the European efforts and plans to relocate subsequent yr, whereas I additionally perceive that Sequoia’s Doug Leone will probably be spending loads of his time in Europe.
Final week on the digital “Node by Slush” occasion, I interviewed Lixandru and Miller and teased out some essential particulars about Sequoia’s plans.
1. Sequoia now believes Europe is producing market leaders forward of Silicon Valley
“There was this evolution and maturity of the tech ecosystem that has been actually significant, that has attracted us to wish to put down boots on the bottom and be extra invested in Europe than ever earlier than,” stated Sequoia associate Matt Miller.
“One change is within the attitudes of younger folks. Europe has at all times been this place the place there’s been unimaginable expertise popping out of the pc science applications, throughout the schools throughout the continent and the U.Okay., and these younger folks beforehand, had been going into careers in funding banking and consulting are greater conglomerates. And now that these younger individuals are taken with startups and expertise careers, that’s fueling loads of nice concepts and loads of nice expertise.
“There was a very long time this query of, when will there be a $10 billion plus startup, and now there’s a number of of them throughout the continent. And now the query has actually modified: When will there be the following hundred billion greenback startup in Europe, and I feel it’s simply an evolution over time.
“We discover ourselves getting pulled increasingly. So when … we wish to spend money on the very best AI semiconductor firm on the earth, we checked out them in China, Israel and Europe. And the one we wished to spend money on was Graphcore, in Bristol [in the U.K.]. And once we regarded … [to] spend money on the very best course of automation firm on the earth, we checked out automation anyplace in California … and we checked out firms all around the world, and the one we wished to spend money on was UiPath in Romania. And that’s more and more changing into the case.”
“To some extent, success breeds success, too,” stated Lixandru. “I feel function fashions are actually highly effective. And the truth that there have been these category-leading firms created out of Europe, however which might be successful on a worldwide scale, like Spotify, Adyen and UiPath … I feel that’s actually inspirational to the following era of founders. And I feel that has helped so much.”
2. The agency will make investments out of the identical fund because the U.S. and Canada
“We work as one partnership throughout two geographies, and we make investments from the identical pool of capital throughout each geographies,” defined Lixandru. “And the rationale behind that’s precisely what Max talked about. We would like to have the ability to associate with class main firms, and if they begin in Paris, or in Stockholm, or in San Francisco, for us, it doesn’t make a distinction. We wish to associate with them early. And we would like to have the ability to assist them on the bottom early … whether or not they begin right here in Europe or within the U.S.”
Associated to this, Sequoia will share carry — the fund’s earnings — with companions throughout the U.S. and Europe, no matter the place companions reside or the place the deal was sourced.
“One of many issues that I like probably the most about Sequoia having been right here near 9 years now could be the best way that we function could be very, very crew centric, and that everyone is compensated the identical quantity in a fund, whether or not or not it’s the funding that they lead or the funding that their associate led,” stated Miller. “So once we make an funding, we lock arms collectively as a crew, and we work collectively to assist that firm achieve success.”
Miller stated portfolio firms in Europe additionally get to work with Sequoia’s operational supporting companions within the U.S., too. “And the financial mannequin is one which helps that,” he stated.