The Sequoia Capital offensive in France

There are names that resonate in the minds of startup founders. Sequoia Capital is one of them. The famous American venture capital fund, which this year celebrates its 50th anniversary, has bet on the most emblematic technology companies such as Apple, Instagram and Google, but also recognized start-ups such as Stripe, Square and Klarna. Originally more specialized in the A and B series, Sequoia Capital now does most seed and pre-seed investments.

Proof of this is the launch of its new eight-week European incubation programme. Called ARC, it consists of injecting a million dollars into a start-up against 10% of its capital. For the first promotion, 17 start-ups were selected, including three French: Popsink, a real-time data processing tool, and two others whose names are not communicated.

a strong brand

According to our information, these are GladIA, a marketplace for AI technologies via API (an IT connector) and Elyn, a deferred payment solution. “The level of ambition of the French and European founders has never been higher. We are also surprised by the diversity of start-ups in terms of industry. There are as many very good BtoC applications as there are infrastructure projects,” George Robson, a partner at Sequoia Capital, tells Echos.

This program allows Sequoia to detect nuggets early when it does not have a team based in France. “There is no financial ambition. In a small sample of start-ups, the probability of having a big winner is quite low. It’s mostly about communication. Their brand is strong, but they still need to impose it in Europe, to show that they are active”, observes Pierre Entremont, partner at Frst, a French venture capital fund.

When the eight weeks are up, each entrepreneur will return to their country and likely promote the venture capital fund in their ecosystem.

An active French community

ARC concludes its European scouting program, launched discreetly in 2020. This initiative, also launched by other funds such as Accel and Atomico, consists of entrusting an envelope of several tens of thousands of euros to handpicked entrepreneurs and investors, who invest in very young start-ups. Roxanne Varza, director of Station F, is one of Sequoia’s most active scouts.

Dinners are also organized in Paris to bring the community around the fund to life. According to our information, last March, about thirty people were gathered: the heads of start-ups that have Sequoia in their capital (Pennylane, Upway, Zefir, etc.), the “scouts”, well-known investors in the ecosystem ( Jean de La Rochebrochard, David Sainteff, Thibaud Elzière…), but also unicorn chiefs that are not part of the Sequoia family, including those of Alan, Qonto, Sorare and Swile.

“We see entrepreneurs as partners. We want to work with them as soon as possible and support them for as long as possible”, says George Robson, who recalls that Sequoia has several funds involved in different stages of start-up maturity (seed, series A, pre-IPO… ), including a “permanent” fund, free from 10-year detention limits.

Investments still confidential

In France, the American manager invested in very young projects. First to catch the London team’s attention was the Pennylane accounting software in June 2021, which also returned to the pot in early 2022. Investments in Upway (refurbished electric bicycles), Zefir (proptech) and Multis (cryptocurrencies) followed. ). Some equity investments, on the other hand, are not public because start-ups prefer to stay under the radar at the moment. According to our information, Sequoia has taken a stake in Evy (insurance), Bits (auctions) and Kanji (NFT), which was originally called Arkania.

Raising with Sequoia, publicly or not, is very prestigious for the founders. “Talents, investors and journalists are much more interested in you,” says Alexandre Berriche, who is a “scout” for the fund. The investment team is valued for other reasons. “They respond very quickly to the founders, whether yes or no, and explain their choices. This is not the case for all funds. I am impressed by your humility and attention to detail. It’s inspiring”, adds Alexandre Berriche, who doesn’t leave his place for anything in the world.

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