SVB fallout unlikely to have an effect on fundraising for Southeast Asia startups, enterprise capitalists say

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 by way of Getty Pictures)

Nikolas Liepins | Anadolu Company | Getty Pictures

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 companies 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,” stated 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 improbable job of stepping in and taking away quite a lot of that threat, creating quite a lot of stability within the markets,” he stated. On Sunday, U.S. officers together with Treasury Secretary Janet Yellen introduced plans to backstop depositors of the financial institution.

Gowdey stated SVB was the agency’s major financial institution, however added, “We pull quite a lot of that cash into Southeast Asia, into Singapore banks. And so for us, the publicity to SVB was not giant.”

Golden Gate Ventures, which additionally invests in Southeast Asian startups, stated 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. 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 “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 harder, Gowdey stated funds in Southeast Asia are effectively 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,” stated Gowdey.

VC companies beforehand informed 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 to fund them,” Ray Wang, founder and chairman of Silicon Valley-based Constellation Analysis, informed CNBC’s “Road Indicators 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.

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