SANTA CLARA, CA, USA – MARCH 13: People wait outside Silicon Valley Bank’s headquarters in Santa Clara, California, to withdraw money after the federal government intervened in the bank’s collapse, on March 13, 2023. (Photo by Nikolas Liepins/Anadolu Agency via Getty Images)
Nikolas Liepin | Anadolu Agency | Getty Images
The collapse of US-based Silicon Valley Bank is unlikely to hit fundraising for tech startups in Southeast Asia, venture capitalists and an analyst told CNBC.
The bank served many venture capital firms and venture capital-backed startups. But last week depositors rushed to withdraw their money as panic over the bank’s financial situation spread, causing it to collapse.
“I think (the impact on fundraising is) a watch, but I don’t think the contagion is spreading,” said David Gowdey, managing partner at Southeast Asian venture capital firm Jungle Ventures, on CNBC’s “Squawk Box Asia” on Tuesday.
“I think Secretary Yellen and the administration did a great job of stepping in and removing a lot of that risk, creating a lot of stability in the markets,” he said. On Sunday, US officials including Treasury Secretary Janet Yellen announced plans to stop the bank’s depositors.
Gowdey said SVB was the company’s primary bank, but added: “We pull a lot of that money into Southeast Asia, into Singapore banks. And so for us the exposure to SVB was not huge.”
Golden Gate Ventures, which also invests in Southeast Asian startups, said the SVB fallout is an opportunity for the region.
“This has actually been helpful for Southeast Asia. It now looks like a golden child 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 said to CNBC’s “Street signs Asia” on Tuesday.
“And this is where Southeast Asia has its time to shine, in light of the situation,” Lauria added.
Asked if the situation makes fundraising more difficult, Gowdey said funds in Southeast Asia are well capitalized.
“I think it’s selective because of the macro environment. (Accessing) the capital is going to be harder, but the capital is there and it’s starting to be deployed,” Gowdey said.
VC firms previously told CNBC as much economic uncertainties have made them more discerning about investments in 2023.
“(In terms of) access to capital for tech entrepreneurs, venture capital firms will still be able to fund them,” Ray Wang, founder and chairman of Silicon Valley-based Constellation Research, told CNBC:Street signs Asia” on Tuesday.
“But it’s the issue of getting a bank loan, having working capital, actually being able to run the business and having a bank that understands how a tech company works or a biotech company. That’s really what’s lost here,” Wang added.