SANTA CLARA, CA, US – MARCH 13: Folks wait exterior the Silicon Valley Financial institution headquarters in Santa Clara, CA, to withdraw funds after the federal authorities intervened upon the financial institution’s collapse, on March 13, 2023. (Picture by Nikolas Liepins/Anadolu Company through Getty Photos)
Nikolas Liepins | Anadolu Company | Getty Photos
The collapse of U.S.-based Silicon Valley Financial institution is unlikely to hit fundraising for tech startups in Southeast Asia, enterprise capitalists and an analyst informed CNBC.
The financial institution served many enterprise capital corporations and enterprise capital-backed startups. However final week, depositors rushed to withdraw their funds as panic over the financial institution’s monetary state of affairs unfold, inflicting it to break down.
“I feel [the impact on fundraising is] a be careful, however I do not suppose that contagion spreads,” mentioned David Gowdey, managing associate at Southeast Asian enterprise capital agency Jungle Ventures, on CNBC’s “Squawk Box Asia” on Tuesday.
“I feel Secretary Yellen and the federal government did a implausible job of stepping in and taking away numerous that threat, creating numerous stability within the markets,” he mentioned. On Sunday, U.S. officers together with Treasury Secretary Janet Yellen introduced plans to backstop depositors of the bank.
Gowdey mentioned SVB was the agency’s major financial institution, however added, “We pull numerous that cash into Southeast Asia, into Singapore banks. And so for us, the publicity to SVB was not massive.”
Golden Gate Ventures, which additionally invests in Southeast Asian startups, mentioned the SVB fallout is a chance for the area.
“This has really been useful to Southeast Asia. It now seems to be like a golden little one to U.S. buyers. Buyers are beginning to say: I wish to diversify to totally different financial institution accounts, totally different geographies, totally different currencies,” Vinnie Lauria, managing associate at Golden Gate Ventures, informed CNBC’s “Street Signs Asia” on Tuesday.
“And that is the place Southeast Asia has the time to shine, in mild of the state of affairs,” added Lauria.
When requested if the state of affairs makes fundraising harder, Gowdey mentioned funds in Southeast Asia are nicely capitalized.
“I feel it is being selective due to the macro atmosphere. [Accessing] the capital will get more durable, however the capital is there and it is getting deployed,” mentioned Gowdey.
VC corporations beforehand informed CNBC that economic uncertainties have made them pickier with investments in 2023.
“[In terms of] entry to capital to tech entrepreneurs, the VCs will nonetheless have the ability to fund them,” Ray Wang, founder and chairman of Silicon Valley-based Constellation Analysis, informed CNBC’s “Street Signs Asia” on Tuesday.
“Nevertheless it’s the query about taking financial institution loans, having working capital, having the ability to really run operations and having a financial institution that understands how a know-how firm works or biotech firm works. That is actually what’s being misplaced right here,” added Wang.