Sequoia Capital reverses 20 years of expansion: closing the London office, Arc and Scouts

A reversal after 20 years of expansion

Sequoia Capital published a memo titled “The Sequoia of Tomorrow” on X on Wednesday morning, containing a series of unexpected decisions, TechCrunch reports. The firm announced raising roughly $10 billion in new funds while simultaneously announcing the closure of its London office, the Arc accelerator and the Scouts program, the merger of its early- and late-stage teams into one, a “flattening” of the partnership, and the end of the Monday partner meeting. The firm itself describes what is happening as an exit from an expansionary phase of roughly 20 years, during which it built several businesses across several geographies; a side effect of that, it admits, was hierarchy. Almost everything now being wound down was created during this period under successive leaders — from Doug Leone through Jim Goetz to Roelof Botha.

What exactly is being shut down

Scouts, a program launched around 2009, gave small checks to founders and operators to invest on the firm's behalf — this way Sequoia saw deals through people closer to young founders than any partner could be. Through the program, Jason Calacanis pointed the firm to Uber, Sam Altman brought in Stripe, and among the first scouts were Airbnb CEO Brian Chesky and Dropbox founders Arash Ferdowsi and Drew Houston. Arc, launched in March 2022 as an answer to Y Combinator, ran several nine-week cohorts a year for pre-seed and seed founders with advances of $500,000 to $1 million. The London office, opened in 2020, is also closing: “We simply don't see the need for a local presence”, the memo says; several people will leave the firm. Sequoia emphasizes that Europe will continue to produce “outstanding founders,” and that they can be supported from the San Francisco Bay Area.

Consequences for Europe and for people

For European founders the decision is especially painful against the backdrop of Andreessen Horowitz closing its London office last year and Coatue's retreat in 2024, TechCrunch notes: Sequoia did not say it would stop funding Europeans, but it cements the return of the center of gravity to the Bay Area. Luciana Lixandru, who came from Accel in 2020 as the firm's first partner in Europe, said she was offered a move to San Francisco, which she declined: “Europe is where my family is and where I want to build”, she wrote on X. According to her, she remains a partner, keeps her board seats, and will personally invest in European founders.

Personnel changes and the new structure

The memo confirms the return of former Workday CEO Carl Eschenbach as a full-time partner (he returned in March) and Doug Leone's “return to action.” The firm now has seven general partners who own and run it: Alfred Lin and Pat Grady as co-leaders, plus Andrew Reed, Shaun Maguire, Konstantine Buhler, Sonya Huang and David Cahn, who joined in 2023. Jess Lee, the firm's first female partner, who oversaw Arc, is no longer shown on the investors page — she remains at the firm as chief product officer. Investor Stephanie Zhan, who had worked at Sequoia since 2015, has left entirely, and last month she announced the launch of her own firm.

Context and caveats

TechCrunch notes that retreats are nothing new for Sequoia: in 2023 the firm spun off its China and India–Southeast Asia units, which became HongShan and Peak XV, ending two decades of existing as a global brand under one name. The cancellation of the Monday partner meetings — a ritual common to almost all funds — is explained by the fact that founders work around the clock; however, the Benchmark team, in a conversation with TechCrunch at Disrupt a month earlier, said that it uses such meetings mainly for socializing. The memo itself acknowledges the cost of the changes: “It is scary to break what already works,” and cautions that whether the decisions are right will not become clear any time soon.