The venture capital firm Sequoia Capital has raised approximately $10 billion in a new round of funding but has also cut back on its operations. On Wednesday, the firm said it will be shutting down its London office and discontinuing two of its founder programs in favor of a more substantial focus on the San Francisco Bay Area. The implication for the European startups is this: without a local presence, does Sequoia still have the ability to provide the same level of support?
Fewer teams, one address
Closing the London office isn’t the only significant change made by Sequoia. It is also laying off its Arc Accelerator along with the Scouts network. It is also merging its early- and late-stage investment teams into one organization without unnecessary middle management. Despite this, Sequoia believes that it can operate effectively even without a local office, saying:
“We simply don’t see the need for a local presence. We believe that Europe will continue to produce outlier founders and companies.”
The decision to close the London office has serious implications for current team members. The office started operations in 2020, but three of the four partners opted against relocation, as reported by the Financial Times . One of the partners who decided not to move is Luciana Lixandru , the company’s first partner in Europe. She said, “I will be staying in Europe where my family is, and I want to build my career there.” Other investors consider the change to be a good decision. One of the founders of Better Tomorrow Ventures Sheel Mohnot said that most changes seem to be reasonable and logical.
The closure of Sequoia’s London office is important due to the fact that the company has played an important role in financing important European startups. In fact, according to an announcement by the firm, Sequoia led a $900 million Series C round for Trade Republic back in 2021. Recently, in May 2026, the firm co-led the $40 million Series B round for Dust based in Paris. Both amounts represent the total funding raised, not Sequoia’s individual investments.
Sequoia Capital’s $10B Reset: London Office Closure and US–Europe VC Funding Gap
AI megadeals pull capital toward the Bay Area
Sequoia’s retreat comes as a few giant deals take up much of the venture market. According to Crunchbase , global funding reached $159 billion in Q3 2026. AI startups attracted $102 billion, or 64% of the total. A record 27 companies each raised at least $1 billion. Together, they took about a third of all funding. Databricks and Safe Superintelligence raised $5 billion apiece.
Much of that money went to the US. American startups drew $91 billion, or 57% of global funding. The Bay Area alone secured 24%. Europe also landed a major deal, with France’s Mistral raising $3.5 billion .
The capital gap Europe is trying to close
The US lead brings Europe’s funding challenges into sharper focus. According to Dealroom , Europe’s share of global venture investment fell from 13.8% in 2016 to 9.3% in 2026. Yet investment in European startups continues to grow. They raised $67.2 billion through September, including $18.6 billion in London.
The bigger problem is access to large investments. The European Central Bank puts the combined size of US venture funds at roughly €930 billion, compared with €150 billion in the EU. These figures represent fund sizes, not quarterly investments. With less capital available locally, European startups face greater difficulty finding investors willing to finance their expansion.
Why the gap may not be the whole story
Still, Europe’s funding gap is not equally wide across every industry. McKinsey found that European vertical-AI startups attracted 67% as much funding as their US peers in the first half of 2026. That is a substantial improvement from just 9% in 2018. An EIF survey also found that investment activity was increasing, even as fundraising and exits remained difficult.
These signs of progress suggest Europe still has opportunities despite its funding disadvantage. Sequoia has also promised to keep investing in European startups from California. Whether that commitment matters will depend on what happens next. Will Sequoia continue leading major European funding rounds, or leave that role to local investors?
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