Sequoia Says Investment in FTX Does Not Negatively Impact its Fund

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The company said its total exposure to FTX was a small portion of its entire portfolio.

Sequoia invested $150 million in FTX and FTX.US via its Global Trust Fund III, noting that the investment accounted for only 3% of the total capital in the fund. The venture capital firm reassured LPs that the fund was in good financial condition as it has realized and unrealized gains of $7.5 billion.There was also a separate investment of $63.5 million in both entities through the SCGE Fund. But the exposure was 1% of its portfolio.

“At the time of our investment in FTX, we ran a rigorous diligence process. In 2021, the year of our investment, FTX generated approximately $1B in revenue and more than $250 million in operating income.” Meanwhile, it remains to be seen what action other FTX backers, like Softbank, and Pantera Capital Temasek, will take.in on the FTX saga, stating that the exchange’s collapse was an indication that the industry was all “smokes and mirrors.” Sen. Warren, one of the fiercest crypto critics on Capitol Hill, said she would continue to push for aggressive enforcement for the SEC to “enforce the law to protect consumers and financial stability.

 

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