Sequoia continues Summit poaching

Sequoia Capital has quietly added former Summit Partners Associate Patrick W. Grady to its team, the third low-ranking Summit employee in the past nine months to join Sequoia.

Grady joins former co-workers Alexander Harrison and Scott Carter and will focus on software and services investments. (The new Sequoia investor should not be confused with the Rearden Commerce CEO and founder of the same name.)

Sequoia has pumped up its team with junior talent from later stage investors. Grady, Harrison and former Technology Crossover Ventures investor Chris Olsen work on the growth fund under the direction of Carter, according to sources.

Grady could not be immediately reached for comment.

The hires are geared toward work on Sequoia’s later stage vehicle. The firm has managed a growth fund in parallel with its core funds since the late 1990s. The first version, Sequoia Capital Franchise Fund, raised $350 million in 1999. The firm’s latest growth fund, Sequoia Capital Growth Fund III, raised about $860 million to do venture growth and PIPE investments. It invested in privately held ITA Software. The 10-year-old company, which designs back-end processing programs for airlines, wanted to grow so it raised $100 million from Sequoia, Battery Ventures, General Catalyst Partners and Spectrum Equity Investors.

Sequoia’s growth fund also plays in the public markets. It worked with Francisco Partners in June to put together a $42 million investment for Blue Coat Systems (Nasdaq: BCSI). Blue Coat used the cash to purchase Network Appliance’s NetCache business. The move gave Blue Coat 1,000 blue chip customers and technology to help it accelerate streaming media.

Last year, Sequoia raised a $175 million China growth fund and a $400 million India growth fund, which would appear to have the same growth focus. It hired three associates for its China office. Sequoia brought Kevin Pan over from China International Capital Corp., where he was an investment banker. It lured Glen Sun away from General Atlantic, where he was focused on IT growth stage investment in China. And the firm hired Shauna Xie, who was a management consultant with the Monitor Group.

Summit spokeswoman Joan Miller says that Grady was at the end of his tenure as an associate with the firm. “We have more than 40 associates at Summit Partners. Roughly one-third of this group leaves each year, in the normal course, at the conclusion of their commitment—which is typically three years in length,” Miller says. Summit raised $3.1 billion for its buyout fund and $300 million for its late stage venture fund in 2005. It expanded its venture fund with a $200 million extension in 2006.