Enterprise capital agency Sequoia Capital tweeted a letter to its companions on Nov. 10, revealing that the agency had decreased its $213.5 million investments in FTX and FTX US to $0 and thought of them full denoted loss.
The letter mentioned the disaster FTX is going through has "created solvency danger" however claimed its publicity to the inventory market is "restricted" in its International Development Fund III, the place its price foundation for the FTX A part of the fund totaled $150 million.
Right here is the notice we despatched to our LPs in GGFIII concerning FTX. pic.twitter.com/Cgp1Yxk1pz
— Sequoia Capital (@sequoia) November 10, 2022
Sequoia additionally assured its companions that the write-down of FTX wouldn't have an hostile impression on the fund, saying it represented lower than 3% of the capital dedicated to it, including:
"The $150 million loss is offset by roughly $7.5 billion in realized and unrealized positive aspects in the identical fund, maintaining the fund in fine condition."
The enterprise capital agency additionally reported investing $63.5 million from its Sequoia Capital International Equities Fund in FTX and FTX US, however the holdings accounted for lower than 1% of the full portfolio.
Sequoia's investments within the now-ailing cryptocurrency alternate got here as a part of FTX's $900 million Sequence B funding spherical in July 2021 -- the biggest crypto funding on report on the time.
Relating to the funding determination, Sequoia assured its companions that it researches each funding with thorough diligence, and FTX was no completely different:
“On the time of our funding in FTX, we performed a rigorous due diligence course of. In 2021, the yr of our funding, FTX generated roughly $1 billion in gross sales and greater than $250 million in working revenue.”
“We take dangers. Some investments will shock to the upside, others to the draw back,” the letter defined.
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Sequoia added that it'll share its subsequent steps with its companions as extra info turns into out there.
Sequoia Capital at the moment has round $85 billion in property underneath administration and has beforehand made early investments in tech giants Apple and Google, and extra not too long ago Airbnb.
