In a statement to investors on Wednesday, the venture capital company stated that while the entire scope of the danger presented to FTX was unknown, it had still opted to mark its investment down to $0. Sequoia tweeted the missive, which elicited both positive and negative feedback from colleagues at other funds.The harm, according to many investors, was essentially restrained. According to Sequoia, the growth fund that supported FTX is still up $7.5 billion.Sequoia invested in the cryptocurrency exchange using two different funds. Through its third growth fund, it invested $150 million in FTX, which according to Sequoia represented less than 3% of that fund’s financial commitments. The fund’s earnings, consisting of $5.8 billion in unrealized gains and $1.7 billion in realized gains, came to $7.5 billion after the wash was offset by other investments, according to the statement.Through a crossover fund, it has another $63.5 million invested in FTX and FTX.US, making up less than 1% of the fund’s total assets.
Investors claim that early bets on DoorDash have protected the growth fund. According to regulatory filings, Sequoia held around 20% of DoorDash at the time the meal delivery service went public in 2020, with an equity stake valued at $5.3 billion at the offering price. According to estimates by tech reporter Eric Newcomer, the company only sold a part of its shares and made more than a billion dollars in profits before the stock price declined from its all-time high. Nihal Mehta, a partner at Eniac Ventures, tweeted that Sequoia also has a holding in Unity, which is fueling the fund’s profits. Before the game-engine business went public in 2020, it held the largest single holding, collecting a stake valued at around $3 billion at the opening price. According to a regulatory filing, the company still held 70% of its initial holding in June.
