SVB’s Fall Unlike Fundraising for Southeast Asian Startups: VCs
People wait outside the headquarters of Silicon Valley Bank in Santa Clara, CA, to withdraw money after the federal government intervened during the bank’s collapse, on March 13, 2023.
Nikolas Liepins | Anadolu Group | Getty Images
The collapse of US-based Silicon Valley Bank is unlikely to hit fundraising for tech startups in Southeast Asia, venture capitalists and analysts told CNBC.
The bank served many venture capital firms and venture capital backed startups. But last week, investors rushed to withdraw their money as panic about the bank’s financial situation spread, causing it to collapse.
“I guess [the impact on fundraising is] watch out, but I don’t think the contagion is spreading,” said David Gowdey, managing partner at Southeast Asian venture capital firm Jungle Ventures, on CNBC’s “Squawk Box Asia” on Tuesday.
“I think Secretary Yellen and the administration did a great job of stepping in and removing a lot of that risk, creating a lot of stability in the markets,” he said. On Sunday, US officials including Treasury Secretary Janet Yellen announced plans to stop the bank’s investors.
Gowdey said SVB is the company’s main bank, but added, “We pull a lot of that money into Southeast Asia, into Singapore banks. And so for us, the level of SVB was not so great.
Golden Gate Ventures, which also invests in Southeast Asian startups, said the SVB product is an opportunity for the region.
“This has been helpful for Southeast Asia. It now looks like a golden child for US investors. Investors are starting to say: I want to diversify into different bank accounts, different geographies, different currencies,” Vinnie Lauria, managing partner at Golden Gate Ventures, told CNBC’s “Street Signs Asia” on Tuesday.
“And this is where Southeast Asia has its time to shine, given the circumstances,” Lauria said.
When asked if the situation makes fundraising more difficult, Gowdey said that money in Southeast Asia is well capitalized.
“I think it’s selective because of the macro environment. [Accessing] the capital will become more difficult, but the capital is there and it is being used,” Gowdey said.
VC firms previously told CNBC that economic uncertainty has made investments better in 2023.
“[In terms of] access to capital to tech entrepreneurs, the VCs will still be able to fund them,” Ray Wang, founder and chairman of Silicon Valley-based Constellation Research, told CNBC’s “Street Signs Asia” on Tuesday.
“But the question is about taking bank loans, getting working capital, being able to run an operation and having a bank that understands how a technology company works or a biotech company working That’s really what’s being lost here,” Wang said.