Sequoia says its investment in FTX is now worthless

Quick Take

  • Sequoia Capital said in a letter to its limited partners that it has marked down the value of all its investments in FTX to zero.   
  • The letter laid out details of its exposure to FTX across different entities under the Sequoia umbrella, which totaled $213.5 million. 
  • Sequoia said the fund is still in good shape, and that said at the time of its investment it had conducted a “rigorous diligence process.” 
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Sequoia Capital, a leading venture capital firm, said in a letter to its limited partners that it has marked down the value of all its investments in FTX to zero.   

The letter, sent today by the Sequoia Capital team and shared by the firm on Twitter, laid out details of its exposure to FTX across two different funds. In total, the venerable venture capital firm stomached a $213.5 million loss. 

“Sequoia Capital’s exposure to FTX is limited,” the letter reads. “We own FTX.com and FTX US in one private fund, Global Growth Fund lll. FTX is not a top ten position in the fund, and our $150 million cost basis accounts for less than 3% of the committed capital of the fund.” 
 
The letter goes on to state that although it took a $150 million loss on FTX, Sequoia’s Global Growth Fund lll is in “good shape” and has returned approximately $7.5 billion in realized and unrealized gains that offsets this loss. 

“Separately, SCGE Fund, L.P. invested $63.5 million in FTX.com and FTX US, representing less than 1% of the SCGE Funds 9/30/2022 portfolio (at fair value),” it continued, detailing a separate fund’s exposure.  

THE SCOOP

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