Sequoia Capital's Blockchain Investment Story: From Traditional Technology to Web3
Sequoia Capital, one of the most influential venture capital firms in the world, has been leading the integration of technology and capital globally since its founding in Silicon Valley in 1972. It has not only propelled the rise of tech giants like Apple and Google but has also gradually turned its attention to the blockchain sector with keen foresight and solid investment logic. This article will explore Sequoia Capital's strategic layout and future outlook in the blockchain space through an in-depth analysis of the founder's story, development history, investment logic, and classic cases.
1. Founder Don Valentine: The Vision and Philosophy of the Father of Silicon Valley
Sequoia Capital was founded by Don Valentine in 1972. At that time, Silicon Valley had not yet become the global technology center, but Valentine, with his deep background in the semiconductor industry, saw the enormous potential of the tech industry. His core philosophy is "invest in people"—to find entrepreneurs with vision and strong execution capabilities.
Under Valentine's leadership, Sequoia Capital made early investments in companies like Apple and Cisco, which later not only reshaped the tech industry but also changed the business models of modern society. He firmly believed that investment should go beyond short-term returns and focus on supporting innovators who can solve fundamental problems.
"Find great entrepreneurs who can solve problems, rather than just chasing market trends." This is Valentine's core philosophy and the reason why Sequoia Capital has been able to transcend eras and remain undefeated.
2. Sequoia Capital's Development History: From Silicon Valley to Global Expansion
In the 1970s and 1980s, Sequoia Capital became a major investor in Silicon Valley startups. The success of companies like Apple, Oracle, and Google established Sequoia Capital's position in the venture capital field, making it synonymous with "tech investment."
In 2005, Sequoia Capital entered the Chinese market, establishing Sequoia China under the leadership of Shen Nanpeng. As one of the founders of Ctrip and Home Inn, Shen understood the unique demands of the Chinese market. He led Sequoia China to invest in a number of tech unicorns such as Meituan, Pinduoduo, and ByteDance, making Sequoia China an investment giant in the Chinese market.
In 2023, Sequoia Capital announced a global split, and Sequoia China was renamed "HongShan," marking its complete independent operation. This move not only solidified Sequoia China's position but also further strengthened its layout in the blockchain sector.
Sequoia Capital first ventured into the blockchain field in 2014 by investing in Huobi. With the rise of decentralized technology and the Web3 concept, Sequoia Capital gradually shifted its investment focus to blockchain infrastructure, DAOs, NFTs, and crypto finance to respond to a new wave of technological change.
3. Sequoia Capital's Investment Logic: Focusing on Innovation and Long-Term Value
Sequoia Capital has always focused on companies that can define the future of their industries. Whether it is tech giants of the internet era or the infrastructure of the blockchain era, Sequoia Capital is committed to capturing technologies that can change the world.
The core investment logic of Sequoia Capital is "invest in people," meaning choosing visionary entrepreneurs. For example, when investing in Meituan, Sequoia China founder Shen Nanpeng recognized Wang Xing's deep insight into market demand and his outstanding execution capabilities.
Sequoia Capital avoids chasing short-term trends and instead emphasizes the long-term value of companies. In the blockchain field, its investment logic is reflected in a focus on technological moats and ecosystem expansion potential, such as investments in infrastructure projects like Nervos and CertiK.
4. Classic Case Analysis: Sequoia Capital's Blockchain Investment Trajectory
1. Huobi
In 2014, Sequoia Capital officially entered the blockchain field by investing in Huobi. This cryptocurrency exchange quickly rose to become one of the leading platforms globally. The success of Huobi (now HTX) not only laid the groundwork for Sequoia Capital's early layout in the blockchain field but also provided rich experience for its subsequent investments.
2. Bitmain
In 2017, Sequoia Capital led Bitmain's Series A financing and added investment in the Series B round. As a leading manufacturer of mining machines globally, Bitmain occupies a dominant market position with its advanced ASIC chip technology. By investing in Bitmain, Sequoia Capital further strengthened its layout in the blockchain hardware infrastructure sector.
3. FTX
In 2021, Sequoia Capital participated in FTX's Series B financing. This exchange quickly rose to prominence among global cryptocurrency trading platforms due to its innovative financial products and technology. Although FTX later experienced a collapse, Sequoia Capital's investment reflected its long-term optimism about the potential of decentralized finance (DeFi) and emerging exchanges.
4. CertiK
CertiK is a leading blockchain security company that provides comprehensive security auditing services for smart contracts and blockchain projects. Sequoia Capital's investment in CertiK further promotes the standardization of security in the blockchain industry. As the blockchain ecosystem expands, CertiK's technology plays a crucial role in ensuring the security of smart contracts and systems.
5. Magic Eden
Sequoia Capital invested in the multi-chain NFT marketplace and rune trading platform Magic Eden. As a leading platform supporting a multi-chain ecosystem, Magic Eden is known for its efficient trading performance and diverse digital asset ecosystem, providing users with fast, low-cost trading fees that attract a large number of users and quickly grow into a leading trading platform in the NFT market and Bitcoin ecosystem. Sequoia's investment highlights its focus on Web3 application scenarios, especially in the NFT and virtual asset fields.
6. STEPN
Sequoia Capital supported STEPN, a "Move-to-Earn" application based on Solana. This platform combines exercise with a blockchain economic model, allowing users to earn tokens while exercising, creating a new blockchain application scenario. Sequoia's investment provided strong support for STEPN's rapid growth and indicated its recognition of the potential for the integration of blockchain and healthy living.
7. LayerZero
LayerZero is a protocol focused on achieving blockchain interoperability, providing cross-chain solutions for decentralized applications by seamlessly connecting multiple blockchains. Sequoia Capital's investment in LayerZero indicates its emphasis on the future development of cross-chain technology. LayerZero's technology brings new possibilities for the interconnectivity of the blockchain ecosystem.
8. DAOs and Web3
In 2021, Sequoia Capital proposed the vision of "helping entrepreneurs create great DAOs" and actively invested in decentralized autonomous organizations (DAOs) and Web3 infrastructure projects. By supporting these innovative forms, Sequoia Capital plays an important role in shaping the future decentralized internet economy.
5. Competing with A16z: How Sequoia Capital Stands Out in the Blockchain Space
Sequoia Capital and A16z (Andreessen Horowitz) are engaged in fierce competition in the blockchain investment field. As two top venture capital firms, they have developed unique investment styles and advantages in the global crypto market.
A16z quickly captured market share with its large crypto fund. Its aggressive investment strategy allows it to rapidly establish a presence in multiple blockchain sectors, particularly excelling in large investment projects in NFTs, decentralized finance (DeFi), and Web3. In contrast, Sequoia Capital adopts a more prudent investment strategy, earning the trust of many entrepreneurs through its deep industry understanding and focus on long-term value.
Sequoia Capital's unique advantages include:
Focusing on Infrastructure Investment: Sequoia places greater emphasis on the underlying technology and infrastructure development of blockchain, such as supporting blockchain security company CertiK and decentralized protocol Conflux.
Avoiding the Traps of Short-Term Volatility: Sequoia Capital focuses on technological moats and ecosystem extensibility, avoiding missed long-term layout opportunities due to chasing trends.
Global Resource Integration: By connecting global technological resources and capital networks, Sequoia not only provides financial support to entrepreneurs but also empowers them in strategic cooperation and market expansion, helping entrepreneurial projects land faster.
The competition between Sequoia and A16z is not only a contest of two investment philosophies in the blockchain space but also a model of how technology and capital can mutually achieve success.
6. Challenges and Opportunities: Future Outlook for Blockchain Investment
One of the biggest challenges facing the blockchain field is regulatory uncertainty and technological risks. The regulatory policies of major global economies regarding cryptocurrencies and blockchain technology are not yet fully clarified, which may affect the development path of the market. At the same time, the rapid iteration of technology also brings potential risks to investments.
Sequoia Capital addresses these challenges by:
Avoiding Policy Risks: Choose to invest in countries or regions with a more favorable policy environment, such as supporting blockchain projects in Southeast Asia and the Middle East.
Building Technological Moats: Prioritize investments in projects with leading technologies to ensure a competitive advantage in the industry.
Diversified Layout: Invest in multiple sectors such as exchanges, security audits, infrastructure, and decentralized finance (DeFi) to mitigate potential risks.
Sequoia Capital not only provides funding to entrepreneurs but also helps projects build a complete ecosystem through strategic cooperation, technical support, and resource integration. This "capital + ecosystem" empowerment model not only enhances the success rate of invested companies but also further consolidates Sequoia Capital's position in the blockchain industry.
Sequoia Capital's ecosystem empowerment is mainly reflected in:
Technical Support: By introducing technical partners, providing underlying architecture optimization and development resources for projects.
Resource Integration: Connecting projects with global markets to help them quickly enter new markets.
Long-Term Support: Continuously monitoring the operational status of invested companies and providing targeted support at various stages.
7. Insights from Sequoia Capital: How Capital Drives Technological Progress
Sequoia Capital's investment practices in the blockchain field provide profound insights for the industry. With long-term strategic layout, global resource integration, and technological empowerment, Sequoia Capital not only promotes the development of blockchain technology but also sets a new benchmark for the entire industry.
1. Establishing an Industry Benchmark for the Combination of Technology and Capital
From the early investment in Huobi to classic cases like CertiK and Bitmain, Sequoia Capital captures industry trends with precision, using capital to promote the maturity and application of underlying technologies, laying a solid foundation for the development of the blockchain industry. These successful cases validate the critical role of technological moats in industry competition and highlight Sequoia Capital's leading position in technology-driven investments.
2. Promoting the Future of DAOs and Web3
Sequoia Capital's deep support for DAOs (Decentralized Autonomous Organizations) demonstrates its profound understanding of future economic models. By investing in Web3 infrastructure and decentralized economic projects, Sequoia is actively promoting the construction of the next generation of the internet, accelerating the transformation of the traditional economy to a decentralized model, and leading a new direction for the global digital economy.
3. Upholding a Long-Term Investment Philosophy
In the blockchain field, which is filled with short-term speculation and market volatility, Sequoia Capital consistently adheres to the core philosophy of "investing in people" and "investing in the future." They avoid the traps of short-term trends and focus more on the technological accumulation and long-term value of companies. This long-term strategy not only consolidates Sequoia's leadership position in the blockchain field but also sets a sustainable development model for the industry.
8. Conclusion: Sequoia Capital's Blockchain Vision
With its keen market insight and global strategic layout, Sequoia Capital has been leading the integration of capital and technology from traditional tech companies to emerging blockchain fields. In the ongoing evolution of the blockchain industry, Sequoia Capital demonstrates how investment institutions can empower technology and lead the industry by supporting infrastructure development, promoting ecosystem innovation, and building a global resource network.
In the future, as decentralized finance, NFTs, DAOs, and the Web3 ecosystem continue to mature, Sequoia Capital will continue to leverage its innovative capabilities, write its own blockchain legend, and inject more vitality into the global blockchain industry.
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