Sequoia Capital raises latest growth effort

Sequoia Capital has raised $929.5 million for Sequoia Capital U.S. Growth Fund IV, according to regulatory documents filed recently with the Securities and Exchange Commission.

Sequoia expects to earn $202 million in salaries and fees from its fourth growth fund, according to the regulatory filing.

The firm’s partners did not respond to requests for comment, but the growth fund is likely the latest iteration of the growth investing fund series that the firm started in 1999, when it raised its $350 growth fund.

Most recently, Sequoia Capital raised a $861.5 million third U.S.-focused growth fund in May 2006, augmenting it with $175 million in January 2007 for a fund called Sequoia Capital Growth Fund III. In addition, late last month, the firm’s overseas affiliate, Sequoia Capital India, closed its second growth equity fund with $725 million in capital commitments.

Over the last two to three years, the Menlo Park, Calif.-based venture firm, long known for its early stage investments, has beefed up its growth stage investing group, as it has hired a handful of former Summit Partners analysts to help it find deals.

Since 2006, Sequoia Capital has added Mickey Arabelovic, Patrick Grady, Alexander Harrison and Scott Carter to its roster of growth fund investors. All are former Summit investors.

It is unclear what relationship the new growth fund and the partners working on it will have to Sequoia’s public market investing initiative. The firm hired several investors this year to make public market investments, including former Clarium Capital investor Ralph Ho, former Maverick Capital investor Michael Beckwith and former Brookside Capital analyst Christopher Lyle.

Though Sequoia Capital has invested in growth stage companies for nearly 10 years, growth investing has become increasingly popular among many VC firms. Early stage stalwart Draper Fisher Jurvetson closed a growth-related fund last year.

Other early stage players have added growth investing to their mandate, such as North Bridge Venture Partners, while other firms have jettisoned early stage investing altogether, opting instead to apply their partners’ expertise to ever-expanding equity deals.

One such firm is Institutional Venture Partners, which moved away from early stage investing after partners split off from the firm to form Redpoint Ventures and Versant Ventures. IVP, which calls itself a late stage venture firm, raised $600 million for its 12th fund in May.

Some early stage venture firms are launching sector-specific growth stage funds. For example, CMEA Ventures, a San Francisco-based technology, life sciences and materials science investor with $1.2 billion under management, is considering adding a growth stage investment fund to focus on cleantech.

Also focused on the niche of growth stage cleantech-related businesses is Kleiner Perkins Caufield & Byers, which in April raised a $500 million Green Growth Fund.