SVB fallout unlikely to affect fundraising for Southeast Asia startups, venture capitalists say

SANTA CLARA, CA, US – MARCH 13: Folks wait outdoors 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 through Getty Photos)

Nikolas Liepins | Anadolu Company | Getty Photos

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 instructed 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,” stated David Gowdey, managing associate 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 unbelievable job of stepping in and taking away a number of that threat, creating a number of stability within the markets,” he stated. On Sunday, U.S. officers together with Treasury Secretary Janet Yellen introduced plans to backstop depositors of the financial institution.

Gowdey stated SVB was the agency’s main financial institution, however added, “We pull a number of that cash into Southeast Asia, into Singapore banks. And so for us, the publicity to SVB was not massive.”

Golden Gate Ventures, which additionally invests in Southeast Asian startups, stated 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 baby to U.S. buyers. Traders are beginning to say: I wish to diversify to totally different financial institution accounts, totally different geographies, totally different currencies,” Vinnie Lauria, managing associate at Golden Gate Ventures, instructed CNBC’s “Avenue 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 gentle of the scenario,” added Lauria.

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

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

VC companies beforehand instructed 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 have the ability to fund them,” Ray Wang, founder and chairman of Silicon Valley-based Constellation Analysis, instructed CNBC’s “Avenue Indicators Asia” on Tuesday.

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

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