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

SANTA CLARA, CA, US – MARCH 13: Individuals wait exterior the Silicon Valley Financial institution headquarters in Santa Clara, CA, to withdraw funds after the federal authorities intervened upon the financial institution’s collapse, on March 13, 2023. (Photograph by Nikolas Liepins/Anadolu Company by way of Getty Pictures)

Nikolas Liepins | Anadolu Company | Getty Pictures

The collapse of U.S.-based Silicon Valley Financial institution is unlikely to hit fundraising for tech startups in Southeast Asia, enterprise capitalists and an analyst informed CNBC.

The financial institution served many enterprise capital companies and enterprise capital-backed startups. However final week, depositors rushed to withdraw their funds as panic over the financial institution’s monetary scenario unfold, inflicting it to break down.

“I believe [the impact on fundraising is] a be careful, however I do not assume that contagion spreads,” mentioned David Gowdey, managing companion at Southeast Asian enterprise capital agency Jungle Ventures, on CNBC’s “Squawk Field Asia” on Tuesday.

“I believe Secretary Yellen and the federal government did a incredible job of stepping in and taking away lots of that danger, creating lots of stability within the markets,” he mentioned. On Sunday, U.S. officers together with Treasury Secretary Janet Yellen introduced plans to backstop depositors of the financial institution.

Gowdey mentioned SVB was the agency’s major financial institution, however added, “We pull lots of that cash into Southeast Asia, into Singapore banks. And so for us, the publicity to SVB was not giant.”

Golden Gate Ventures, which additionally invests in Southeast Asian startups, mentioned the SVB fallout is a chance for the area.

“This has truly been useful to Southeast Asia. It now appears to be like like a golden little one to U.S. traders. Buyers are beginning to say: I wish to diversify to completely different financial institution accounts, completely different geographies, completely different currencies,” Vinnie Lauria, managing companion at Golden Gate Ventures, informed CNBC’s “Road Indicators Asia” on Tuesday.

SVB crisis: Southeast Asia now looks like a 'golden child' to U.S. investors, says VC firm

“And that is the place Southeast Asia has the time to shine, in mild of the scenario,” added Lauria.

When requested if the scenario makes fundraising tougher, Gowdey mentioned funds in Southeast Asia are properly capitalized.

“I believe it is being selective due to the macro surroundings. [Accessing] the capital will get more durable, however the capital is there and it is getting deployed,” mentioned Gowdey.

VC companies beforehand informed CNBC that financial uncertainties have made them pickier with investments in 2023.

“[In terms of] entry to capital to tech entrepreneurs, the VCs will nonetheless be capable to fund them,” Ray Wang, founder and chairman of Silicon Valley-based Constellation Analysis, informed CNBC’s “Road Indicators Asia” on Tuesday.

“But it surely’s the query about taking financial institution loans, having working capital, with the ability to truly run operations and having a financial institution that understands how a know-how firm works or biotech firm works. That is actually what’s being misplaced right here,” added Wang.