Sequoia shuts London office as VC firm refocuses on Silicon Valley

Prominent tech investor Sequoia Capital is closing its European headquarters in London in a setback to the UK’s ambitions to become a major player in the booming AI industry.

Sequoia announced the closure, which follows a similar retreat from China and India, in a social media post on Wednesday.

“We simply don’t see the need for a local presence” in Europe, the venture capital firm said. “We believe that Europe will continue to produce outlier founders and companies, and that we can continue to provide world-class support from our home base in the Bay Area.”

The international retreat marks another period of upheaval at a firm best known for lucrative bets on Apple, Google, OpenAI and SpaceX, after the tumultuous departure of former managing partner Roelof Botha a year ago.

After opening outposts in China, India and Europe over the past two decades, Sequoia has now in effect exited all overseas markets to refocus on Silicon Valley. It opened its UK office in 2020 during the pandemic-era tech boom.

Its former Chinese and Indian divisions now operate independently as HongShan and Peak XV Partners, respectively.

Sequoia’s retreat from Europe follows a similar move by its Silicon Valley neighbour Andreessen Horowitz, which closed its London office last year after less than two years. Sequoia said it would continue to invest in European start-ups from its San Francisco office.

Nevertheless the departures are a blow to Britain’s ambitions to position itself as a major player in the rapidly growing AI industry, which is dominated by the US and China.

Sequoia’s four London-based partners were given the option to relocate to the US to stay with the firm. Three of the four opted not to move, including Luciana Lixandru, who co-led Sequoia’s early-stage investment business globally. They will continue working with existing portfolio companies but will not make new investments with Sequoia.

“When given the opportunity to move to San Francisco, I chose to stay here and focus on this wonderful, imperfect ecosystem,” Lixandru said in a social media post.

Another Sequoia partner in Europe, Matt Miller, had already left the firm and launched his own fund last year.

Sequoia opened its office in London amid a broader push by US investment companies looking for new opportunities abroad. However, European technology start-ups still lag far behind their US counterparts in terms of their ability to raise capital, especially from local investors.

Despite the dominance of the US and China, London-based AI start-ups such as ElevenLabs, Ineffable Intelligence and Isomorphic Labs have still benefited from an increase in venture funding.

Sequoia’s investments in Europe have included Swedish buy-now, pay-later pioneer Klarna, German fintech Trade Republic, French accounting start-up Pennylane and German defence tech firm Stark.