Sequoia Capital has raised approximately $10 billion in a new funding round while simultaneously scaling back its international operations. On Wednesday, the venture firm said it will shut its London office and discontinue two founder programs as it concentrates its resources on the San Francisco Bay Area. The dual announcement pairs fresh capital with a deliberate narrowing of the firm's geographic footprint, and it raises a pointed question for European startups: without a local presence, can Sequoia still provide the same level of support?

Fewer teams, one address

The London closure is not the only significant change at the firm. Sequoia is also winding down its Arc Accelerator and disbanding its Scouts network, and it will merge its early- and late-stage investment teams into a single organization stripped of unnecessary middle management. Arc is the firm's accelerator program for early-stage founders, while the Scouts network is a community of founders and operators who invest in startups at their earliest stages.

Despite retreating from physical operations in Europe, Sequoia maintains that it can operate effectively without a local office. “We simply don’t see the need for a local presence. We believe that Europe will continue to produce outlier founders and companies,” the firm said in an announcement published on X.

The decision carries serious implications for the office's existing team. The London operation began in 2020, but three of its four partners opted against relocating to California, according to the Financial Times. Among them is Luciana Lixandru, Sequoia's first partner in Europe. “I will be staying in Europe where my family is, and I want to build my career there,” she said.

Among outside investors, the reaction has been largely positive. Sheel Mohnot, a founder of Better Tomorrow Ventures, said most of the changes appear reasonable and logical.

The closure carries weight because Sequoia has played a central role in financing prominent European startups over the past several years. According to an announcement by the firm, Sequoia led a $900 million Series C round for Trade Republic in 2021. More recently, in May 2026, it co-led the $40 million Series B round for Paris-based Dust, as covered by Seedcamp. Both figures represent the total funding raised in each round, not Sequoia's individual investments.

AI megadeals pull capital toward the Bay Area

Sequoia's retrenchment comes as a handful of giant deals absorbs an ever-larger share of the global venture market. Global funding reached $159 billion in the third quarter of 2026, according to Crunchbase. AI startups attracted $102 billion of that total, or 64%. A record 27 companies each raised at least $1 billion, and together they took in roughly a third of all funding. Databricks and Safe Superintelligence raised $5 billion apiece. For a sense of scale, Sequoia's new pool of roughly $10 billion is about twice the size of the $5 billion raised by each of those two companies.

Much of that capital flowed to the United States. American startups drew $91 billion, or 57% of global funding, with the Bay Area alone securing 24%. That is the same region Sequoia is now concentrating its resources in. Europe did land one 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. The shrinking share came even as absolute investment rose: European startups raised $67.2 billion through September, including $18.6 billion in London.

The bigger problem is access to large pools of capital. The European Central Bank puts the combined size of US venture funds at roughly €930 billion, compared with €150 billion in the EU — figures that represent fund sizes rather than quarterly investment. With less capital available on home turf, European startups face greater difficulty finding investors willing to finance their expansion at scale.

Why the gap may not be the whole story

Still, Europe's funding gap is not equally wide across every sector. McKinsey found that European vertical-AI startups, which build AI applications tailored to specific industries rather than general-purpose models, attracted 67% as much funding as their US peers in the first half of 2026 — a substantial improvement from just 9% in 2018. An EIF survey also found investment activity increasing, even as fundraising and exits remained difficult.

These signs of progress suggest Europe still has opportunities despite its funding disadvantage. Sequoia, for its part, has pledged to keep investing in European startups from California. Whether that commitment matters will depend on what happens next: will the firm continue to lead major European funding rounds, or leave that role to local investors?