SINGAPORE — Compared to startups, Southeast Asia’s enterprise capital companies might see a much bigger affect from the collapse of Silicon Valley Bank as a result of discovering a substitute for the U.S.-based financial institution within the area shall be difficult.
“I think from a VC firm’s perspective, you will see a bigger impact here,” mentioned David Gowdey, managing accomplice at Jungle Ventures, informed CNBC’s “Squawk Box Asia.”
“That’s really because the local banks here aren’t providing the same product and services that SVB provides,” Gowdey mentioned Tuesday, including that SVB was Jungle Ventures’ main financial institution.
While SVB served tech startups and enterprise capital companies largely positioned within the U.S. or have a presence within the U.S. Some VCs primarily based in Southeast Asia — equivalent to Jungle Ventures and Golden Gate Ventures — had been additionally purchasers of SVB.
The financial institution supplied VC companies and startups entry to the U.S. capital market in addition to networking alternatives within the U.S.
SVB served and constructed a really sturdy product providing for VC companies, mentioned Gowdey, including that Jungle Ventures will now most likely should “look for a Big Four player in the U.S. to be our partner.”
In phrases of changing a number of the options that SVB supplies within the U.S., it’s “going to be hard,” mentioned Vinnie Lauria, managing accomplice at Golden Gate Ventures, on CNBC’s “Street Signs Asia” on Tuesday.
“We were a client of SVB so we understand the value-add very well,” mentioned Lauria.
Lauria certified that lower than 1% of Golden Gate Ventures’ whole portfolio had banked with SVB. For these firms backed by Golden Gate that banked with SVB, they didn’t have interaction full banking companies with the U.S. financial institution, he mentioned.
Only two firms in Jungle Ventures’ portfolio of greater than 70 startups had publicity to SVB, mentioned Gowdey.
“That was really because [these two companies] had operations in the U.S.,” he added.
While the 2 firms had publicity to SVB, just one had materials publicity, mentioned Gowdey, including that the corporate that confronted materials publicity had engaged SVB for payroll companies.
As for startups in Southeast Asia, VC companies say they won’t probably be hit by the contagion from the collapse of Silicon Valley Bank.
“The reality is, here in Southeast Asia, a lot of the startups were really buffered. Most did not bank with Silicon Valley Bank,” mentioned Lauria from Golden Gate Ventures.
“So the reality is, Southeast Asia is already very isolated from what was happening in Silicon Valley,” he mentioned.
Source: www.cnbc.com