Investment capital firm Sequoia Capital tweeted out instructions delivered to its partners on November. 10 revealing the firm had marked its $213.5 million investments in FTX and FTX US lower to $, claiming them like a complete loss.
The letter stated the crisis facing FTX has “created a solvency risk” but claimed its contact with the exchange is “limited” in the Global Growth Fund III, where your buck foundation for the FTX area of the fund totaled $150 million.
This is actually the note we delivered to our LPs in GGFIII regarding FTX. pic.twitter.com/Cgp1Yxk1pz
— Sequoia Capital (@sequoia) November 10, 2022
Sequoia also reassured its partners the writing from FTX wouldn’t possess a harmful effect on the fund, saying it taken into account under 3% from the capital dedicated to it, adding:
“The $150M loss is offset by ~$7.5B in recognized and unrealized gains within the same fund, therefore the fund remains who is fit.”
The investment capital firm also reported getting invested $63.5 million into FTX and FTX US from the Sequoia Capital Global Equities Fund. However, the holdings symbolized under 1% from the entire portfolio.
Sequoia’s investments in to the now cash-strapped cryptocurrency exchange came as an ingredient of FTX’s $900 million Series B investment round in This summer 2021 — that was the biggest crypto investment ever recorded at that time.
When it comes to financial commitment, Sequoia reassured its partners it extensively researches every single investment with thorough diligence, and FTX wasn’t any different:
“At time in our purchase of FTX, we ran an extensive research process. In 2021, the entire year in our investment, FTX generated roughly $1B in revenue and most $250M in operating earnings.”
“We are in the industry of taking risk. Some investments will surprise towards the upside, and a few will surprise towards the downside,” the letter described.
Sequoia added it would communicate its next movements to the partners when more details opens up.
Sequoia Capital presently has about $85 billion of assets under management and it has formerly made early investments in tech giants Apple and Google and, more lately, Airbnb.