VC US investor profile: Sequoia Capital [Menlo Park, California]

Founded in 1972 by Don Valentine, Sequoia Capital has emerged as one of the most prominent venture capital firms in the world. Valentine, who had extensive experience in the semiconductor industry, established the firm during the formative years of what is now recognized as Silicon Valley. With Sequoia’s inaugural fund of $3 million, Valentine made groundbreaking investments in Apple and Atari, two companies that would go on to revolutionize personal computing and gaming.

Over the decades, Sequoia has consistently partnered with transformative companies, reinforcing its reputation as a key player in the tech industry. The firm’s early investments in iconic companies such as Cisco and Google laid the groundwork for its continued success. More recently, Sequoia has supported rising stars like Instagram, Airbnb, and Stripe, contributing significantly to their growth and establishment as leaders in their respective sectors. This firm is part of our list of venture capital investors in the US.

Sequoia Capital’s Approach

One of the unique aspects of Sequoia Capital’s approach is its commitment to investing on behalf of nonprofit organizations and educational institutions. Key partners such as the Ford Foundation and Boston Children’s Hospital are limited partners in Sequoia’s funds, allowing the firm to align its financial success with meaningful societal contributions. This dual focus creates a dynamic where achieving strong financial returns goes hand in hand with supporting education and healthcare initiatives. Sequoia’s investment strategy thus extends beyond mere profit generation; it actively contributes to funding essential services in critical sectors, amplifying its broader societal impact.

Investment Philosophy

Sequoia Capital’s investment philosophy is rooted in several key principles that have guided its approach to venture capital. A primary focus is on targeting large, established markets. The firm believes that entering existing markets with innovative products is more effective than attempting to create entirely new ones. This strategy is exemplified by their early investments in Atari and Apple, as well as their backing of modern Software-as-a-Service (SaaS platforms like Medallia.

Additionally, Sequoia employs a practice of sequential market identification, where it identifies and responds to evolving market needs. For example, after its investment in Apple, Sequoia recognized a demand for better memory systems, leading to their investment in Tandon Corporation. The firm also places a strong emphasis on storytelling, understanding that a founder’s compelling narrative can attract both investors and customers. A notable example of this is Sequoia’s backing of FireEye, where the founder articulated critical cybersecurity challenges that needed addressing

Sequoia is particulaly drawn to startups that offer unique and innovative solutions, such as ClearTax, a platform that simplifies India’s complex tax landscape. The firm values frugality and cash flow discipline, as evidenced by WhatsApp’s extraordinary growth with a small, lean team. Moreover, Sequoia’s commitment to long-term partnerships enables it to remain invested in successful companies like Google for decades, fostering sustained growth. Finally, the firm implements strict milestones for its portfolio companies and makes tough decisions to cut losses when necessary, ensuring that resources are allocated to the most promising ventures.

Recent Endeavors: Fireworks AI

In line with its investment strategy, Sequoia Capital recently led a $52 million Series B funding round for Fireworks AI, a Redwood City-based generative AI inference platform provider. This latest round has elevated Fireworks AI’s total capital raised to $77 million and its valuation to an impressive $552 millions. The funding attracted participation from significant players like NVIDIA, AMD, and MongoDB, as well as previous investors, including industry leaders such as former Snowflake CEO Frank Slootman and former Meta COO Sheryl Sandberg.

Fireworks AI aims to leverage this funding to expand its team and enhance its platform, enabling developers to seamlessly transition AI applications from prototype to production. Under the leadership of CEO Lin Qiao, the company has developed an inference engine that allows for the creation of production-ready, compound AI systems. By utilizing minimal human-curated data and ultra-fast LoRA fine-tuning, developers can quickly customize models to meet specific needs, facilitating rapid deployment. Currently, Fireworks AI supports over 100 state-of-the-art models across various formats—text, image, audio, embedding, and multimodal—optimized for latency, throughput, and cost per token.