Sequoia Launches $950M in New Early-Stage Funds to Back Next-Gen Founders Amid AI Boom

Despite growing concerns about an AI bubble, Sequoia Capital remains committed to its long-standing investment philosophy. “Markets go up and down, but our strategy remains consistent. We’re always looking for outlier founders with ideas to build generational businesses,” said Bogomil Balkansky, a partner on Sequoia’s early-stage team. To reinforce this focus, the firm announced two new funds on Monday: a $750 million early-stage fund targeting Series A startups and a $200 million seed fund. These amounts closely mirror the sizes of funds launched about three years ago, signaling a return to Sequoia’s core mission after a period of turbulence. In 2021, Sequoia restructured into an evergreen main fund supported by specialized sub-funds, designed to allow the firm to hold onto equity in portfolio companies long after their IPOs. The move, however, was followed by setbacks, including a $200 million loss from its FTX cryptocurrency investment in late 2022, and the 2023 separation from its India and China operations. Now, the firm is refocusing on its roots: identifying and backing exceptional founders at the earliest possible stage. “Our ambition has always been and continues to be to identify these founders as early as possible; to roll up our sleeves and be a very active participant in their company-building journey,” Balkansky said. With AI startup valuations surging, Sequoia sees early-stage investing as critical to securing both favorable pricing and meaningful ownership stakes. The firm’s recent early bets in companies like Clay, Harvey, n8n, Sierra, and Temporal have seen their values multiply in the AI boom. Balkansky emphasized that Sequoia is not just investing at the Series A level but is increasingly going even earlier—what the firm now classifies as pre-seed. “We have an amazing track record and tradition to partner with companies at the very earliest stage, which today will be classified as a pre-seed,” he said. The firm’s early conviction is evident in its first checks into companies like Xbow, a security testing platform; Traversal, an AI reliability engineer; and Reflection AI, a DeepSeek alternative. All have since raised significant capital at much higher valuations. Sequoia has played a hands-on role in their growth, including recruiting a former Databricks CRO to Xbow’s board, connecting Traversal with over 30 potential customers, and facilitating a pivotal meeting between Reflection AI and Nvidia CEO Jensen Huang—resulting in a $500 million investment from the chipmaker. Despite its storied history of backing companies like Airbnb, Google, Nvidia, and Stripe, Sequoia remains relentlessly focused on the future. To instill this mindset, the firm’s newly renovated office features a wall where every investor has handwrote a reminder: “We are only as good as our next investment.”