SANTA CLARA, CA, USA – MARCH 13: People wait outside Silicon Valley Bank headquarters in Santa Clara, California to withdraw funds after the federal government intervened in the bank’s collapse on March 13, 2023. (Photo by Nikolas Liepins /Anadolu Agency via Getty Images)
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The collapse of US-based 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 last week, depositors rushed to withdraw their funds as panic spread over the bank’s financial condition, leading to its collapse.
“I think [the impact on fundraising is] be careful, but I don’t think the contagion is spreading,” David Gowdy, managing partner of Southeast Asian venture capital firm Jungle Ventures, told CNBC’s “Squawk Box Asia” on Tuesday.
“I think Minister 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, US officials, including Treasury Secretary Janet Yellen, announced plans to support the bank’s depositors.
Gowdy said SVB was the firm’s main bank, but added: “We’re bringing a lot of this money to Southeast Asia, to banks in Singapore. So for us the impact of SVB was small.’
Golden Gate Ventures, which also invests in Southeast Asian startups, said the fallout from SVB is an opportunity for the region.
“It was really good for Southeast Asia. Now it looks like a golden child for American investors. Investors are starting to say, I want to diversify into different bank accounts, different geographies, different currencies,” Vinny Lauria, managing partner at Golden Gate Ventures, told CNBC’s “Street Signs Asia” on Tuesday.
“And this is where Southeast Asia has time to shine in the light of the situation,” Lauria added.
When asked if the situation makes it difficult to raise funds, Gowdy said that funds in Southeast Asia are well capitalized.
“I think it’s selective because of the macro environment. [Accessing] it will be more difficult for capital, but there is capital and it is being deployed,” Gowdy said.
Venture capital firms previously told CNBC that economic uncertainty has made them more selective about investments in 2023.
“[In terms of] access to capital for tech entrepreneurs, VCs will still be able to fund them,” Ray Wang, founder and chairman of Constellation Research in Silicon Valley, told CNBC’s “Street Signs Asia” on Tuesday.
“But it’s a question of getting bank loans, having working capital, being able to actually run operations and having a bank that understands how a technology company or a biotech company works. That’s what’s being lost here,” Wang added.