Indian Startups Relax As Withdrawal Limit For Silicon Valley Bank increased
By Team Startupcity | Tuesday, 14 March 2023, 11:27 IST
Startups, who have been trying to find ways to reclaim their deposits locked with the California-based lender, might find some respite from the US regulator's effort to calm markets by guaranteeing troubled Silicon Valley Bank depositors access to all of their money.
Siddarth Pai, a founding partner at 3one4 Capital, places the exposure of Indian businesses to SVB in the $2.5 to $3 billion area. "The decision has undoubtedly given entrepreneurs some reassurance, but the more important question is whether founders will be able to withdraw all of their funds from the bank at once and whether the system will be able to facilitate this procedure. The US financial system's backend infrastructure is not as strong as India's, and if no new management is brought in, there could be significant withdrawals.
For the time being, companies are feeling a little relieved. The founder of a local B2B startup backed by US technology startup accelerator Y Combinator said the announcement is favourable for startups and VCs. “Also, never has any depositor lost money in a bank run or failure. Even companies which had not prepared for such an eventuality would have survived after navigating a brief period of disruption. There are anyway lots of companies providing line of credit to startups now,” the founder said.
Rajeev Chandrasekhar, the state minister for electronics & technology, claimed that due to the US government's action, there are no longer any impending concerns for Indian entrepreneurs. The crisis has taught Indian startups to have more faith in their banking system, according to Chandrasekhar.
Pai said that at least 60 of the more than 100 unicorn companies in India had their headquarters abroad. "Nearly all SaaS startups have their headquarters abroad. 90–95 percent of the 250 or so Indian firms backed by Y Combinator are situated outside of India, according to Pai.
Read More News :
Startups will have access to all of their Silicon Valley bank deposits
Fintech startup GrayQuest increases $7 million for funding led by Pravega Ventures