Venture capital firm Sequoia Capital has written down its entire US$213.5 million investment in FTX, the company revealed in a tweet on Thursday.
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Fast facts
- In the letter sent to selected partners, Sequoia reported it marked down its US$213.5 million investment in FTX.com and FTX US to US$0 due to the “solvency risk” the crypto company faced.
- Sequoia attempted to reassure investors of its “limited” exposure to FTX and that its investment in the exchange platform “is not a top 10 position” in its Global Growth Fund III – the private fund in which the majority of the FTX holdings are held
- The firm said its cost basis for the FTX portion of Global Growth Fund III totalled US$150 million, less than 3% of the fund’s committed capital.
- The rest of the firm’s investment in FTX.com and FTX US – US$63.5 million – is held in its Sequoia Capital Global Equities Fund and accounts for less than 1% of the fund’s portfolio.
- “We are in the business of taking risk,” Sequoia said, explaining that some investments “will surprise to the upside” and some “will surprise to the downside,” but tried to provide assurance that the company “does not take this responsibility lightly” and conducts “extensive research and thorough diligence on every investment.”
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