- Although SVB serves tech startups and venture capital firms, some VCs mostly in the US or based in Southeast Asia – such as Jungle Ventures and Golden Gate Ventures – have also been clients of SVB.
- Many VC firms in Southeast Asia may face challenges in finding another bank that offers products similar to the collapsed SVB, say venture capital firms in the region.
- “Really, it’s because the local banks don’t offer the same product and services that SVB does,” David Gaude, managing partner of Jungle Ventures, told CNBC’s “Squawk Box Asia.”
SINGAPORE — Compared to startups, venture capital firms in Southeast Asia are likely to see a bigger impact from the collapse of Silicon Valley Bank.
“From a VC firm’s perspective, I think you’re going to see a big impact here,” David Gowde, managing partner at Jungle Ventures, told CNBC’s “Squawk Box Asia.”
“The local banks here really don’t offer the same product and services as SVB,” Gaude said on Tuesday, adding that SVB is Jungle Ventures’ flagship bank.
Although SVB serves tech startups and venture capital firms, some VCs mostly in the US or based in Southeast Asia – such as Jungle Ventures and Golden Gate Ventures – have also been clients of SVB.
The bank provided VC firms and startups with access to the US capital market and networking opportunities in the US
SVB has built and delivered such a strong product offering to VC firms that Jungle Ventures will now “need to look for a Big Four player in the US as our partner,” Gowde said.
It will be “difficult” to replace some of the features SVB offers in the U.S., Vinny Lauria, managing partner of Golden Gate Ventures, told CNBC.Street Signs Asia“On Tuesday.
“We have been a client of SVB, so we understand the value addition very well,” Lauria said.
Laria qualified that less than 1% of Golden Gate Ventures’ total portfolio was banked with SVB. For companies banking with Golden Gate-backed SVB, they are not fully banking with Bank of America, he said.
Out of Jungle Ventures’ portfolio of more than 70 startups, only two companies have expressed SVB, Gowde said.
“That’s really the reason [these two companies] There were operations in the US,” he added.
While both companies had exposure to SVB, only one company had material exposure, Gowdey said, adding that the company that faced material exposure engaged SVB for payroll services.
As for startups in Southeast Asia, VC firms say they are unlikely to be affected by the contagion caused by the collapse of Silicon Valley banking.
“The reality is that here in Southeast Asia, a lot of startups are actually buffered. Most are not bankable in Silicon Valley,” said Lauria of Golden Gate Ventures.
“So the reality is that Southeast Asia is already very insulated from what’s happening in Silicon Valley,” he said.