The first victims begin to drop the mask. Venture capital firm Sequoia Capital has just released a letter to its partners stating that the value of its investment on FTX has fallen to zero. The firm was exposed for $214 million.
From $214 million to 0
Sequoia Capitala well-known venture capital firm in the cryptocurrency ecosystem, said in a letter to its partners that all of its investments in FTX no longer worth anything. This news comes in the context of the case that affects Alameda Research and FTXboth companies of Sam Bankman-Fried.
The letter, shared by Sequoia Capital on Twitter, details its exposure to FTX through two different funds. In total, the venture capital firm suffered a loss of $213.5 million.
Here is the note we sent to our LPs in GGFIII regarding FTX. pic.twitter.com/Cgp1Yxk1pz
— Sequoia Capital (@sequoia) November 10, 2022
Sequoia Capital explains that FTX faced a “liquidity crisis having created a risk of insolvency”, but specifies that he does not know the extent of the damage, in the same way as each user of the platform. However, the firm has mourned its investment and now considers it lost.
In its letter, Sequoia Capital nevertheless specifies that its exposure to FTX was limited and that the company is doing well. Only two funds were committed, the Global Growth Fund III and the SCGE Fund, up to 150 million and $63 million respectively :
“We own FTX.com and FTX US in a single private fund, Global Growth Fund III. FTX is not in the fund’s top ten positions, and our cost base of $150 million represents less than 3% of the fund’s committed capital. »
Despite this deadweight loss of $150 million, Sequoia’s Global Growth Fund lll is in ” Good shape “ and brought in about $7.5 billion into realized and unrealized gains that compensate for this loss.
“Separately, SCGE Fund has invested $63.5 million in FTX.com and FTX US, which represents less than 1% of the portfolio as of September 30, 2022.”
We will not fail to raise the astonishing performances of the various funds of this venture capital company. But above all, we will remember one sentence: “At the time of our investment in FTX, we conducted a rigorous control process “. No comment.
👉 Are you lost in this case? Find our article to understand everything about the collapse of FTX
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