MUMBAI, March 12 (Reuters) – India’s minister of state for technology said on Sunday he would meet with start-ups this week to assess the impact on them of the collapse of Silicon Valley Bank (SIVB. O), as concerns grow over the fallout for India. start-up sector.
California banking regulators shuttered Silicon Valley Bank (SVB) on Friday after a run on the lender, which had $209 billion in assets at the end of 2022, with depositors withdrawing up to $42 billion in a single day, rendering it insolvent.
“Startups are an important part of India’s new economy. I will be meeting with Indian startups this week to understand the impact on them and how the government can help them during the crisis,” Rajeev Chandrasekhar, Minister of Health, said on Twitter. ‘State at Computing.
India has one of the largest startup markets in the world, with numerous multi-billion dollar valuations in recent years and the backing of overseas investors, who have made bold bets on digital and other technology ventures.
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SVB’s failure, the largest in the United States since the 2008 financial crisis, has rattled global markets, hit banking stocks and is now unsettling Indian entrepreneurs.
Two partners of an Indian venture capital fund and a lender to Indian start-ups told Reuters they were checking with portfolio companies on any SVB exposure and, if so, whether it represents a part significant portion of their total bank balance.
Consumer internet startups, which have attracted the bulk of funding in India in recent years, are less affected because they do not have SVB accounts or have little exposure to them, the three people said.
“I have spoken to some founders and this is very bad,” Ashish Dave, CEO of Mirae Asset Venture Investments (India), wrote in a tweet.
“Especially for Indian founders… who have set up their US companies and increased their initial round, SVB is the default bank. Uncertainty kills them. Growth companies are relatively safer because they diversify. The last thing that the founders needed.”
Software company Freshworks (FRSH.O) said it had little exposure to the SVB situation relative to the company’s overall balance sheet.
“As we have grown, we have tapped into larger and more diversified banks such as Morgan Stanley, JP Morgan and UBS. The vast majority of our cash and marketable securities today are not held by SVB,” Freshworks said in a blog post, adding that the company does not anticipate any disruption to employees or customers.
Freshworks said it works with customers and vendors who use its SVB account to migrate to other bank accounts.
India’s Nazara Technologies Ltd (NAZA.NS), a mobile games company, said in a stock market filing that two of its subsidiaries, Kiddopia Inc and Mediawrkz Inc, held cash balances totaling $7.75 million or 640 million rupees with SVB.
Reporting by Mr. Sriram and Munsif Vengatil; Written by Swati Bhat; Additional reporting by Jahnavi Nidumolu; Editing by Alexander Smith and Sharon Singleton
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