In a demonstration of faith in the ongoing potential of the UK’s tech start-up scene, Sequoia Capital, one of Silicon Valley’s leading venture capital funds, is to set up a new office in London. Industry sources were reported this weekend as saying they believe the office will open later this year. The move comes as reports also suggest the VC star name is ‘stalking’ a number of UK-based tech start-ups with a view to a post-Brexit buy up of promising tech assets.
Sir Michael Moritz, the Welsh billionaire who started out as a journalist before moving into venture capital successfully enough to be named the number one venture capitalist on the Forbes Midas List in both 2006 and 2007, is a partner at Sequoia. Among the VC fund’s most successful investments have been taking early stakes in both Google and WhatsApp. The fund has also invested in Apple, Cisco, Airbnb, Dropbox, DoorDash, Electronic Arts, Instagram, HubSpot, NVIDIA and Moovit, to name just some of the big tech names it holds stakes in.
Sequoia is rumoured to have already moved to try and entice partners from other UK-based VCs to head up the new London office, though no appointments have so far been announced.
The news is likely to be greeted enthusiastically by the UK’s tech start-up sector. Arguably the sector’s biggest issue is a lack of investors with the capacity to inject sums of £10 million or more – so called ‘growth capital’. That sees companies often hit a glass ceiling when they reach the stage of needing larger sums of capital to transition from promising start-ups into serious, sustainable businesses. However, the fact that the slack is being taken up by a U.S. VC is again likely to open the debate around many of the UK’s most promising companies falling into foreign ownership.
Sequoia itself has declined to comment on the rumours and The Times newspaper quotes a source it qualifies as ‘familiar’ with the VC as saying the company so far has no ‘concrete plans’, to open a London office. However, the same source did say Sequoia representatives have been “spending more and more time in London to form a strategy on how to better serve the European market”.
Given the relative certainty other sources look to have around the development, it can be presumed that ‘no concrete plans’, is most likely a coy or diplomatic way to say that not everything is yet in place. Unless something comes along to derail a process that seems to already be in motion, Sequoia does appear to be moving towards a new, permanent London residence.
The now more than 250 tech start-ups that Sequoia Capital has invested in over the years have a current combined market value of £2.5 trillion. In 1999 the VC made a $12.5 million investment in Google that was worth $4.3 billion within 6 years.
To date, UK-based investments the VC has made include microchip designer Graphcore and beauty brand Charlotte Tilbury.