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The venture capital giant Sequoia Capital is splitting its China business into a separate entity amid rising tensions between Washington and Beijing.
The renowned Silicon Valley group, which made bets on fast-growing tech companies such as TikTok parent ByteDance and Alibaba, said on Tuesday it would run its Chinese business as a “completely independent” entity from its US operation.
The Chinese arm will give up the Sequoia name and instead be called HongShan, a romanisation of its Chinese name, which means redwood.
The VC group will also separate its Indian and south-east Asian business into a third entity, it said, adding that the changes would take place by March next year.
Roelof Botha, managing partner of Sequoia Capital, said in an interview that a decision to break up was taken in the past few months. “It really was a very complicated decision. Over the years, we have reassessed the cost-benefit trade-off of this arrangement and whether it was the right structure for the firm. We realised it was time for this.”
Neil Shen, the billionaire founder of Sequoia China, told the Financial Times: “There’s much less in common now” between the different Sequoia entities. He said conversations about splitting the businesses “have been evolving over the last two to three years”.
The split marks an end to one of the most successful US-China investing alliances. It has reaped rewards for the American mother ship and seeded generations of Chinese tech companies since Shen launched Sequoia China in 2005 as an arm of Sequoia Capital.
Shen has raised billions of dollars from US investors as recently as last year and has been confronted with the delicate task of investing in Beijing’s priority areas such as semiconductors and artificial intelligence, while staying on the right side of Washington’s push to introduce controls