The Funded: How nervous is the venture world getting about China?

Sequoia Capital's decision to separate its operations into three geographically based entities may be a sign that Silicon Valley is re-evaluating its relationship with China.

The venerable Menlo Park venture capital firm announced Tuesday it's splitting from its India- and China-focused arms. Sequoia attributed the move to the complexity of managing such wide-spread operations and brand confusion among them.

But some observers believe there's more to the story, notably how the growing tension between the United States and China is affecting technology investments.

Sequoia's investments in China "have been the subject of criticism inside the normally clubby world of technology investing, and the firm is facing a looming executive order from the Biden White House that could curtail U.S. investments into foreign entities," Bloomberg reported Wednesday.

The firm's breakup is an attempt to get ahead of that order, according to Bloomberg. Each of its separate entities will be headed by a different Sequoia partner: Roelof Botha in the U.S., Shailendra Singh in India and Neil Shen in China.

The split "clearly demonstrates" the firm is sensitive to the risks of being too tied to China, Jeffrey Fiedler, a former commissioner at the U.S.-China Economic and Security Review Commission, told Bloomberg. Sequoia's move will prompt investors to press other venture and private equity firms about their China ties, Fiedler predicted.

Investors will likely be asking "Sequoia is nervous — are you guys nervous?" he said.

Now, onto midweek funding and investor news from the Bay Area:

Funding rounds

M&A

J. Jennings Moss and Anthony Duignan-Cabrera contributed to this report.