Image Credits - Bloomberg News
A U.S. Congressional committee has initiated investigations into Sequoia Capital, following its prior examinations of various other venture capital firms for their investments in Chinese technology companies.
Sequoia Capital Headquartered in California, USA is a financial company specializing in venture capital investments. The U.S. Committee is currently scrutinizing Sequoia Capital for its investments in China, particularly in the fields of semiconductors, artificial intelligence, and quantum technology. The committee is conducting an ongoing inquiry amid suspicions that these investments may be contributing to China’s military capabilities. Furthermore, the company has undergone a rebranding in China and now operates under the name HongShan.
A spokesperson from Sequoia Capital emphasized that they have severed ties with Sequoia China due to the impracticality of complying with certain restrictions imposed on U.S. entities by China. They emphasized that Sequoia U.S. is a distinct and unconnected entity, and any previous associations with the Chinese counterpart are now a thing of the past.
Despite the division between Sequoia U.S. and the recently restructured Hongshan (formerly Sequoia China), the former is currently under investigation as lawmakers are determined to thoroughly examine all aspects of the situation.
The primary objective is to curtail U.S. investments in the People’s Republic of China (PRC) with a focus on preventing funding for military development and addressing allegations of human rights abuses.
Beyond Sequoia Capital, other venture capital firms such as GGV Capital, GSR Ventures, Walden International, and Qualcomm Ventures are also facing scrutiny. Given the strained US-China relationship, the United States is currently revising its policy towards China under the Biden administration.
Sequoia Capital has been instructed to provide a comprehensive explanation by November 1, including details on fund management and the identification of its limited partners. Furthermore, Hongshan, the rebranded entity, must confirm that nearly 50% of its partners are U.S. stakeholders.
BREAKING: Chairman @RepGallagher and Ranking Member @CongressmanRaja announce a bipartisan probe into @sequoia following its announcement to split from Sequoia Capital China.
“[S]plitting off its China business … is a step in the right direction. However… Sequoia Capital… pic.twitter.com/anDYih3rfJ
— The Select Committee on the CCP (@committeeonccp) October 18, 2023