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Sequoia Capital’s competition for early WhatsApp deal

By
Dan Primack
Dan Primack
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By
Dan Primack
Dan Primack
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March 5, 2014, 7:46 PM ET
Felicis Ventures founder Aydin Senkut

FORTUNE — Oh, what could have been.

When Facebook (FB) last month agreed to buy mobile messaging company WhatsApp for approximately $19 billion, many of us noted how the deal helped solidify Sequoia Capital as the world’s top venture capital firm. Not only was this the largest sale ever of a VC-backed company, but Sequoia had somehow managed to be WhatsApp’s only venture capital investor. My original estimate was around a $3.4 billion payday for Sequoia, which was more than double the firm’s entire fund. And now that the overall deal value has been pushed past $20 billion thanks to Facebook’s rising stock price, Sequoia may actually have tripled the fund (at least on paper).

But Sequoia almost didn’t get to invest at all.

Fortune has learned that, back in 2011, the firm had competition for the deal from Felicis Ventures, a micro-VC fund led by former Google (GOOG) executive Aydin Senkut.

I’m told that the WhatsApp founders only wanted to work with a single firm (something they held to over the years), and ultimately picked Sequoia in what was a very hard fought battle. Seems that Sequoia’s deep pockets ($1 billion+ fund) overcame a more “flexible” term sheet from Felicis (one source suggests that the valuation was left blank).

Senkut declined to comment on the specifics of his offer, except to say that “Sequoia won that deal with grit and deserve the amazing win.”

Felicis, of course, is doing fine. The firm raised $70 million for its third fund in 2012, and has invested in such companies as Climate Corp. (acquired by Monsanto), Mint (acquired by Intuit), Bonobos, Dropcam, Practice Fusion and Rovio. And, unlike most other VC firms, it at least had the insight to fight for an early investment in WhatsApp. But that doesn’t mean the loss still doesn’t sting a little. Or maybe a lot…

Sign up for Dan Primack’s daily email newsletter on deals and deal-makers: GetTermSheet.com

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