The bankruptcy of Silicon Valley Bank (SVB), the largest bank for the startup ecosystem, has created uncertainty in the sector overnight and is expected to adversely impact India’s startup landscape as well. Industry experts said this.
Ashu Garg, a venture capitalist and early-stage investor in Silicon Valley, said, “We hope that this matter will be resolved soon. But I believe this will affect Indian startups a lot.
The world’s leading technology startups and venture capital firms know Silicon Valley Bank (SVB) well.
After SVB filed for bankruptcy, its regulator closed the bank by confiscating its assets. Some startups having bank accounts are facing difficulties in paying their employees. They fear that if they cannot access their funds, they may have to shelve their projects.
Garg said, “Silicon Valley Bank has been a real supporter for Indian startups and has given them banking services. Most Indian startups doing business in the US take the services of this bank. It is among the very few institutes willing to work with Indian banks. Otherwise, a large number of banking institutions do not want to work with foreign customers.
Considering the fact that every third startup founder in Silicon Valley is Indian-American, experts say these founders will face trouble from next week itself, with issues related to paying employees and basic payments.
Garg said that the collapse of SVB is going to have very serious ramifications for Indian-Americans and their companies. A group of venture capitalists from Silicon Valley held a meeting on the topic of recent developments and said that what has happened in the last 48 hours is very disappointing and worrying.
“If there is an attempt to buy and capitalize SVB, we will strongly support it and encourage our portfolio companies to maintain banking relationships,” said Indian-American Naveen Chadha, an early-stage investor.
