Tech-loving Sequoia unfazed by impending economic slump

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In today’s featured piece, our interviewee, Abheek Anand, managing director of Sequoia Capital Southeast Asia, highlights the need to keep an eye out for “enduring” companies – firms that can last through countless market cycles. It’s because of these startups that Sequoia hasn’t been forced to make significant changes to its investment plans even amid an economic slowdown.

While small businesses are more vulnerable to macroeconomic speed bumps due to their lack of scale, it’s underperforming and poorly managed firms that are commonly believed to be more likely to buckle under the weight of a recession even if they are well funded. In other words, tough times separate the winners from the losers across industries.

Anand thinks the current market downturn is unlikely to be a short one, but will result in many enduring businesses becoming fundamentally strong and growing into large businesses in the long run.

In the latest edition of Recession Run, a Q&A series on VC and investment strategies during an economic downturn, Tech in Asia gets the lowdown on why Sequoia Capital Southeast Asia has no plans to steer clear of tech-enabled sectors and how it intends to come out stronger from this “necessary and healthy correction in the markets.”

Today we look at:

• Sequoia’s bets during a downturn
• Binance’s regulatory issues in the Netherlands
• Other newsy highlights such as Animoca names latest head honcho and Singapore-based Fintonia scores Dubai digital assets license

Also, if you’re an entrepreneur looking for funding, fill out this form to get your company featured on our list of fundraising startups.

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Last month, Sequoia Capital launched its first fund – worth US$850 million – for Southeast Asia after operating in the region for over 10 years.

“What this fund signals is the growing conviction among the team and limited partners on the long-term opportunities in Southeast Asia,” Anand said. “We continue to believe in the potential of tech-enabled sectors such as consumer internet, fintech, and B2B SaaS (software as a service), as well as emerging ones like deeptech, healthtech, and Web3.”

• To be first: After operating in Southeast Asia for more than a decade, Sequoia will double down on the region, with a special focus on its infant businesses. It will look to partner with founders and startups in the very early stages of their journey.
• Prove your worth: Booming valuations and a steady stream of funding into startup ecosystems are things of the past now. However, the impending economic slowdown offers startups the opportunity to justify their bull-market valuations, according to Anand.
• Bigger picture: Anand also shared a few words of wisdom on the kind of firms to look for in an economic downturn, stating that while the “markets have clearly turned,” Sequoia’s investments are more geared towards “2030 and beyond.”

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