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HomeBusinessSequoia's Surge to increase seed round ticket size to $3 million

Sequoia’s Surge to increase seed round ticket size to $3 million

New Delhi: Surge, the accelerator and incubation programme floated by Sequoia Capital, will increase its seed funding round ticket size to $3 million from the current $1-2 million.

Increasing the ticket size allows the early-stage founders the runway and time they need to find product-market fit and build a strong team before raising a Series A, said Sequoia, which launched Surge in 2019 to sharpen its focus on early-stage investing, in a blog. 

“This is critical in any market cycle, and even more so at a time when investors are being more cautious and follow-on rounds may take longer to close,” it added.

Notably, Surge will also remove the minimum $1 million floor and invest as little as $300,000-500,000 to make it more relevant for a large pool of founders.

“We’ve also met many pre-launch founders over the last few years who are still thinking through their product and want a smaller round to manage dilution – which also becomes even more critical in a downmarket,” it explained. Since 2019, Surge has launched six cohorts and more than 20% of the selected startups were pre-seed when it partnered with them.

This tweak in the ticket size will apply to its eight cohorts that will be launched next year.

The Surge programme has partnered with 112 startups including 64 from India and 45 from Southeast Asia across its six cohorts. These startups have in total raised more than $1.5 billion in follow-on rounds, the blog said.

Sequoia Capital intensified its focus on early-stage bets when it launched the Surge programme in January 2019. It also hired Rajan Anandan, who was Google’s Southeast Asia and India vice-president, as a managing director in April 2019 to focus on Surge.

The Menlo Park-headquartered venture firm has invested in more than 130 startups in India including unicorns such as Ola, MuSigma and Zomato, though it was not an early investor in any of them.

Last year, Sequoia Capital India also marked the final close of its second seed fund, as the venture capital firm continued to deepen its focus on investing in startups at an early stage.

Earlier this month, Sequoia Capital raised $2.85 billion ( 22,240 crore) across a set of funds to continue financing entrepreneurs to invest in Southeast Asia and India.

Sequoia Capital’s record fundraise comes at a time when the startup ecosystem is undergoing a funding crunch along with a correction in valuations after a hectic dealmaking activity in 2021.

Notably, the fund closure had been delayed as the VC firm had been embroiled in alleged financial irregularities and corporate misgovernance at some of its portfolio firms such as BharatPe, Trell and Zilingo.

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