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Sequoia Capital Breaks VC Taboo with Investment in Anthropic
Sequoia Capital, a prominent venture capital firm, is reportedly joining a blockbuster funding round for Anthropic, the AI startup behind Claude, according to the Financial Times. This move is sure to turn heads in Silicon Valley, as venture capital firms have historically avoided backing competing companies in the same sector, preferring to place their bets on a single winner.
Sequoia’s decision to invest in Anthropic is particularly surprising given the firm’s existing investments in OpenAI and Elon Musk’s xAI. The timing is also notable, as OpenAI CEO Sam Altman previously addressed rumors about restrictions in OpenAI’s 2024 funding round, stating that investors with ongoing access to OpenAI’s confidential information would have their access terminated if they made non-passive investments in OpenAI’s competitors.
Anthropic’s Funding Round and Valuation
According to the FT, Sequoia is joining a funding round led by Singapore’s GIC and U.S. investor Coatue, which are each contributing $1.5 billion. Anthropic is aiming to raise $25 billion or more at a $350 billion valuation, more than double its $170 billion valuation from just four months ago. The WSJ and Bloomberg had earlier reported the round at $10 billion, with Microsoft and Nvidia committing up to $15 billion combined, and VCs and other investors contributing another $10 billion or more.
The Sequoia connection with Altman runs deep, with the firm backing him when he dropped out of Stanford to start Loopt. Altman later became a “scout” for Sequoia, introducing the firm to Stripe, which became one of the firm’s most valuable portfolio companies. Sequoia’s new co-leader Alfred Lin and Altman also appear to have a close relationship, with Lin having interviewed Altman numerous times at Sequoia events.
Sequoia’s Reversal on Portfolio Conflicts
Sequoia’s apparent reversal on portfolio conflicts is especially glaring given its historical stance. In 2020, the firm took the extraordinary step of walking away from its investment in payments company Finix after determining the startup competed with Stripe. Sequoia forfeited its $21 million investment, letting Finix keep the money while giving up its board seat, information rights, and shares.
The reported Anthropic investment comes after dramatic leadership changes at Sequoia, where the firm’s global steward, Roelof Botha, was pushed out in a surprise vote this fall. Anthropic is reportedly preparing for an IPO that could come as soon as this year. We’ve reached out to Sequoia Capital for comment.
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