SVB collapse unlikely to hit fundraising for Southeast Asian startups: VCs

  • VCs and an analyst told CNBC that the collapse of Silicon Valley Bank is unlikely to affect fundraising for tech startups in Southeast Asia.
  • “I think it’s surveillance, but I don’t think the contagion is spreading,” David Gowdey, managing partner at Southeast Asian venture capital firm Jungle Ventures, said on “Squawk Box. Asia” from CNBC.
  • Constellation Research analyst Ray Wang also told CNBC that VCs will still be able to fund tech entrepreneurs.

SANTA CLARA, CA, USA – March 13: People wait outside the Silicon Valley Bank headquarters in Santa Clara, California to withdraw funds after the federal government intervened in the bank’s collapse, the 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 is unlikely to affect fundraising for tech startups in Southeast Asia, venture capitalists and an analyst have told CNBC.

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

“I think (the impact on fundraising is) something to watch, but I don’t think the contagion is spreading,” David Gowdey, managing partner of the South Asian venture capital firm, said on Tuesday. -Est Jungle Ventures, on CNBC’s “Squawk Box Asia.”

“I think Secretary Yellen and the government have done a fantastic job of stepping in and removing a lot of that risk, creating a lot of stability in the markets,” he said. On Sunday, U.S. officials, including Treasury Secretary Janet Yellen, announced plans to back depositors at the bank.

Gowdey said SVB was the main bank for the business, but added: “We’re getting a lot of that money out of Southeast Asia, out of banks in Singapore. And so for us the exposure to SVB was not important.”

Golden Gate Ventures, which also invests in startups in Southeast Asia, said the spinoff from SVB is an opportunity for the region.

“It’s actually been helpful to Southeast Asia. Now it 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, told CNBC’s “Street Signs Asia” on Tuesday.

“And that’s where Southeast Asia has time to shine, given the situation,” Lauria added.

Asked if the situation made fundraising more difficult, Gowdey said funds in Southeast Asia were well capitalized.

“I think it’s selective because of the macro environment. (Access) to capital will become more difficult, but the capital is there and it’s rolling out,” Gowdey said.

Venture capitalists have previously told CNBC that economic uncertainties have made it harder for them to invest in 2023.

“(In terms of access to capital for tech entrepreneurs, VCs will still be able to fund them,” Ray Wang, founder and president of Silicon Valley-based Constellation Research, told CNBC’s “Street Signs Asia” on Tuesday.

“But it’s a matter of getting bank loans, having working capital, being able to run operations, and having a bank that understands how a technology company or a business works. biotech. That’s really what’s lost here,” Wang added.

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