A fallout from overlapping portfolios, particularly after the rise of AI, is a key factor behind the breakout and rebranding of the India/South East Asia and China operations of Sequoia Capital.

The global venture capital leader also had to contend with complexities over a growing asset book, compliances and brand confusion as it decided to split. But Peak XV Partners, the rebranded entity which gets its name from Mount Everest, will still have to tackle multiple challenges, market observers said.

The three major geographic regions for Sequoia are US/Europe, China and India/SEA.

In a global business update, Sequoia Capital said it has decided to split along geographies — US/Europe, China and India/South East Asia — to become three distinct firms with separate brands by no later than March 31, 2024.

While the US/Europe business will continue to be known as Sequoia Capital, the China business will adopt the name HongShan and India/SEA, Peak XV Partners.

In an official statement, Peak XV Partners said it has raised $9.2 billion across 13 funds and has invested in over 400 start-ups in the region.

Over 50 companies in its portfolio have crossed a $1 billion valuation, and the venture firm has realised $4.5 billion through exits, which include 19 initial public offers and mergers and acquisitions.

“Over the years, the strategies for each business have diverged and our scale and market leadership across different geographies has started to result in brand confusion and portfolio conflict.

This has led the leaders of each business to collectively decide to move to fully independent partnerships with distinct brands to serve our founders and limited partners in the best manner,” the statement said.

According to Inc42, Peak XV has invested in data management unicorn Druva, while the US portfolio of Sequoia includes Cohesity, which has a similar business model.

In the China portfolio, Sequoia has a stake in TikTok parent Bytedance which competes with Verse Innovation’s short video app Josh.

And there are more such instances. But for Singapore-based Shailendra Singh, one of the 11 managing directors of Peak XV Partners, the concern is more about the future. The changing landscape, particularly around generative AI, has necessitated a rethink of potential portfolio conflicts.

“If we get locked out of important companies in our region and couldn’t invest in them because of founder conflict in AI, that would be pretty debilitating,” Singh said in an interview with Forbes. Sequoia is an investor in ChatGPT’s parent company OpenAI.