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SVB collapse unlikely to hit fundraising for Southeast Asia startups: VCs

SANTA CLARA, CA, US – MARCH 13: Individuals wait outdoors 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 by way of Getty Photographs)

Nikolas Liepins | Anadolu Company | Getty Photographs

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 instructed 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 scenario unfold, inflicting it to break down.

“I feel [the impact on fundraising is] a be careful, however I do not assume that contagion spreads,” mentioned David Gowdey, managing associate at Southeast Asian enterprise capital agency Jungle Ventures, on CNBC’s “Squawk Field Asia” on Tuesday.

“I feel Secretary Yellen and the federal government did a incredible job of stepping in and taking away a whole lot of that danger, creating a whole lot of stability within the markets,” he mentioned. On Sunday, U.S. officers together with Treasury Secretary Janet Yellen introduced plans to backstop depositors of the financial institution.

Gowdey mentioned SVB was the agency’s major financial institution, however added, “We pull a whole lot of 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 like a golden little one to U.S. traders. Traders are beginning to say: I wish to diversify to completely different financial institution accounts, completely different geographies, completely different currencies,” Vinnie Lauria, managing associate at Golden Gate Ventures, instructed CNBC’s “Road Indicators Asia” on Tuesday.

“And that is the place Southeast Asia has the time to shine, in mild of the scenario,” added Lauria.

When requested if the scenario makes fundraising tougher, Gowdey mentioned funds in Southeast Asia are nicely capitalized.

“I feel it is being selective due to the macro surroundings. [Accessing] the capital will get tougher, however the capital is there and it is getting deployed,” mentioned Gowdey.

VC corporations beforehand instructed CNBC that financial uncertainties have made them pickier with investments in 2023.

“[In terms of] entry to capital to tech entrepreneurs, the VCs will nonetheless be capable of fund them,” Ray Wang, founder and chairman of Silicon Valley-based Constellation Analysis, instructed CNBC’s “Road Indicators Asia” on Tuesday.

“However 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.