Sequoia considers auditing Asian investment portfolios
- ByStartupStory | January 24, 2023

After allegations of failures in Zilingo and GoMechanic, Sequoia is considering auditing its South Asian investments. Following claims of financial irregularities at companies including Zilingo Pte and GoMechanic, Sequoia Capital’s regional arm in South and Southeast Asia is considering conducting special audits of a number of investments in the area.
According to sources familiar with the decision who requested not to be identified discussing private information, the venture capital firm will collaborate with Ernst & Young on some of these audits and will raise budget allocations to aid investee companies in putting governance guardrails in place. According to the sources, Sequoia Capital India will be more picky when applying for board positions at firms and, in some situations, could replace junior members of their team with more senior partners.
According to the persons, Sequoia used to limit its due diligence to individual companies before making investments.
“As a matter of practice, Sequoia Capital India & Southeast Asia conducts due diligence ahead of new, first-time investments. We may conduct diligence ahead of a follow-on round; at this juncture, we have not put a mandate for special audits,” a Mumbai-based spokesperson for the company said in an emailed statement.

The regional division of the Silicon Valley investment group that supported Google and Apple Inc. is called Sequoia Capital India & Southeast Asia.
The latest difficulty for Sequoia Capital India was the discovery of bookkeeping errors during due diligence on GoMechanic, a firm within its portfolio, that the startup’s co-founder publicly acknowledged last week. According to a story last week by Bloomberg News, the potential investor group that hired EY cancelled plans to fund GoMechanic and told Sequoia of the cancellations.
Sequoia, which has supported GoMechanic since 2019 and is its largest stakeholder with a 27% interest, according to Tracxn, said in a joint email statement with other investors that it was unaware of the bookkeeping issues.
Due to suspected irregularities at some of its portfolio companies, the India and Southeast Asia team allegedly delayed by over a month last year’s announcement of the financing of $2.85 billion across three funds.
Sequoia Capital India has expanded its geographic reach to Southeast Asia since beginning in India more than 16 years ago and has backed more than 400 startups. Other companies supported by them that have been accused of breaking restrictions include BharatPe and Trell.