SVB’s collapse unlikely to affect fundraising for Southeast Asian startups: VC

SANTA CLARA, CALIFORNIA, USA – MARCH 13: People wait to withdraw money in front of Silicon Valley headquarters after the federal government intervened in a bank collapse on March 13, 2023 in Santa Clara, California. (Photo by Nicholas Liepins/Anadolu). Agency via Getty Images)

Nicholas Liepins | Anadolu Agency Getty Images

The collapse of a US Silicon Valley bank is unlikely to affect fundraising for tech startups in Southeast Asia, venture capitalists and an analyst told CNBC.

The bank has served many venture capital firms and venture capital-backed startups. But panic broke out over the bank’s financial condition last week, causing it to collapse as depositors rushed to withdraw their funds.

“I think [the impact on fundraising is] be careful, but I don’t think there will be contagion,” David Gowdy, managing partner of Southeast Asian venture capital firm Jungle Ventures, said on CNBC’s “Squawk Box Asia” on Tuesday.

“I think Secretary Yellen and the government have done a great job of creating a lot of stability in the market and removing a lot of that risk,” he said. On Sunday, US officials, including Treasury Secretary Janet Yellen, announced plans to freeze bank depositors.

Gowdy said SVB is the firm’s main bank, but added, “We’re pulling a lot of that money into Southeast Asia, Singapore banks. So the exposure to SVB for us wasn’t huge.”

Golden Gate Ventures, which also invests in Southeast Asian startups, said SVB’s decline is an opportunity for the region.

“It’s actually been good for Southeast Asia. Now it’s like a golden boy for US investors. Investors are starting to say, ‘I want to diversify into different bank accounts, different geographies, different currencies,'” Vinny Lauria, Golden’s managing partner. Gate Ventures reported to CNBC’s “Street Signs in Asia” on Tuesday.

“Given this situation, Southeast Asia has its time to shine,” Lauria added.

Asked if the situation makes fundraising difficult, Gowdy said funds in Southeast Asia are well capitalized.

“I think it’s selective because of the macro environment. [Accessing] the capital is going to get harder, but the capital is there and it’s being deployed,” Gowday said.

VC firms previously told CNBC that economic uncertainty made it difficult to invest in 2023.

“[In terms of] Access to capital for tech entrepreneurs, VCs can still fund them,” Ray Wang, founder and chairman of Silicon Valley-based Constellation Research, told CNBC’s “Street Signs Asia” on Tuesday.

“But it’s about getting a bank loan, having operating capital, being able to do real operations, and having a bank that understands how a tech company or a biotech company works. That’s what’s really missing,” Wang added.

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