SANTA CLARA, CA, USA – MARCH 13: People wait outside Silicon Valley Bank headquarters in Santa Clara, CA, to withdraw funds after the federal government intervened when the bank collapsed, on March 13, 2023. (Photo by Nikolas Liepins/Anadolu Agency via Getty Images)
Nikolas Liepins Anadolu Agency Getty Images
The collapse of US-based Silicon Valley Bank will not help fund-raising for tech startups in Southeast Asia, venture capitalists and analysts told CNBC.
The bank serves many venture capital firms and venture capital-backed startups. But last week, depositors rushed to withdraw their funds in panic as the bank’s financial condition unraveled, leading to its collapse.
“I think [the impact on fundraising is] a watch out, but I don’t think that the contagion is widespread, “said David Gowdey, managing partner in Southeast Asia venture capital firm Jungle Ventures, on CNBC”Squawk Box Asia” on Friday.
“I think Secretary Yellen and the administration did a very good job of stepping in and taking on a lot of that risk, creating stability in the markets,” he said. On Sunday, US officials including Treasury Secretary Janet Yellen announced plans to bail out the bank’s depositors.
Gowdey said SVB is the company’s main bank, but added, “We’re pulling a lot of that money into Southeast Asia, into Singaporean banks. And for us, SVB’s exposure isn’t huge.”
Golden Gate Ventures, which also invests in Southeast Asian startups, said SVB’s downfall is an opportunity for the region.
“It really helped Southeast Asia. Now it looks like a golden boy 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 situation,” Lauria added.
When asked if the situation made fundraising more difficult, Gowdey said funds in Southeast Asia are well capitalized.
“I think it’s selective because of the macro environment. [Accessing] capital will be more difficult, but the capital is there and it has been deployed,” Gowdey said.
The VC firm previously told CNBC that economic uncertainty is making them less likely to invest in 2023.
“[In terms of] access to capital for tech entrepreneurs, VCs can still fund,” Ray Wang, founder and chairman of Silicon Valley-based Constellation Research, told CNBC’s “Street Signs Asia” Tuesday.
“But the question is about getting a bank loan, having operating capital, being able to actually open an operation and having a bank that knows how technology companies can work or biotech companies can work. That’s really what’s missing here,” added Wang.