Sequoia Capital's China business to become separate entity

Investing.com -- Sequoia Capital has said it plans to spin off its business in China into a separate entity, as the venture capital giant looks to simplify its operations in an "increasingly complex" environment.

The move, which was announced in a message to Sequoia's limited partners on Tuesday, will see its Chinese unit become its own entity known as HongShan in English. Sequoia has a storied history in China, serving as backers of some of the country's most famous brands like TikTok-owner ByteDance and e-commerce giant Alibaba (NYSE:BABA).

At the same time, Sequoia's unit in Southeast Asia and India will adopt the name Peak XV Partners, while its division in the U.S. and Europe will retain the Sequoia Capital name.

Neil Shen, a partner at Sequoia along with Roelof Botha and Shailendra Singh, will helm the Chinese business. Singh will head up Sequoia's operations in Southeast Asia and India, while Botha will run the U.S. and Europe business.

All of these entities are set to turn into "independent" and "separate" brands no later than the end of March next year, according to Sequoia.

In a statement, Sequoia argued that the challenges of running a "decentralized global investment business" are increasing.

"[E]ach business has evolved to meet the opportunities in their markets across a wide range of sectors," the company said.

As a result, Sequoia flagged that its practice of using a centralized system for back-office functions like payroll and logistics is now "more of a hindrance than an advantage."