Monday, March 27, 2023

Indian startups are also feeling the jolt – Usky News

Bengaluru: Crisis Silicon Valley Bank ,svb) has not only shaken the global stock markets but also sent shockwaves through the Indian startup world.
SVB has investments in over 20 startups in India and started investing here in 2003. According to startup research advisory Trackxn, SVB has invested in several Indian firms including Paytm, InMobi, CarWale, Bluestone, Shaadi and Sarva. In October last year, SVB had invested $150 million in contract intelligence company Icertis.
In fact, SVB started venture lending operations in India through SVB India Finance, which provides debt capital to domestic, venture-backed, early and medium, high-growth companies in the country. SVB opened offices in Bangalore in 2004 and Mumbai in 2007. It has established a global technology center in Bengaluru, with approximately 800 people providing services in engineering, analytics and testing.
Sources told TOI that startups in India are eyeing the development and some are looking to move their money out of SVB. None of the startup founders came on the record to share their next steps, but they are worried about the venture funding tap drying up in a weak market.
Seed investor Shrishti Sahoo tweeted: “Most VCs are asking Indian companies to bank with SVB (about 80% of startups have US entities) to withdraw their money. If this continues, their deposits are going to dry up fast and unless a rescue plan is devised, the money will most likely be gone. ,
Deepak Shenoy, founder and CEO of Capitalmind, said in a tweet, “It (SVB) is in trouble not because of bad lending practices but because of a combination of strange way of investing short term money when another bank is insolvent.” , and then telling people not to panic. Some on Twitter compared it to a “Lehman moment for startups”.
Former Coinbase CTO Balaji Srinivasan posted on Twitter, “Building a business is hard. My sympathies are with Silvergate and SVB, both of whom served many customers in good times and bad. I hope SVB pulls through.” . . and that we can finally build a system that is not subject to the ups and downs of fractional reserve banking.”


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