Sequoia Capital tells investors it did proper due diligence on FTX
Sequoia Capital tells investors it did proper due diligence on FTX
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Sequoia Capital says it did proper due diligence on FTX
, author of Photo illustration by Jakub Porzycki/NurPhoto via Getty Images. Venture capital firm Sequoia Capital on Wednesday sent to investors about its investment in FTX, the global crypto exchange that after being valued at over $30 billion. Why it matters: Sequoia is arguably the most successful venture capital firm ever, having made early investments in such companies as Apple, Google and Airbnb. This episode is a rare black eye, leaving both the firm and its limited partners scrambling for information. What they're saying: Sequoia's message was threefold. Its $150 million of exposure to both FTX and FTX.US in its third global growth fund represents less than 3% of that fund's total capital commitment. Sequoia also has another $63.5 million investment via a crossover fund called SCGE. In both cases, it's marked the value down to zero.Sequoia conducted adequate due diligence at the time of investment, in a profitable company that had around $1 billion or revenue and $270 million of operating income. The firm continues to seek more information on what went wrong. Of note: Axios has learned that Sequoia and other members of an FTX advisory board held a call today with FTX CEO Sam Bankman-Fried, but that they still don't have access to detailed balance sheet data. Most FTX investors with whom Axios has spoken expect to write the value of their shares down to zero. Earlier: Rival crypto exchange Binance from a tentative agreement to buy FTX, saying that the company's "issues are beyond our control or ability to help."