US admin's stance on SVB reassuring for startups who have funds there: Nasscom
2 min read . Updated: 13 Mar 2023, 09:51 PM IST
PremiumBiden administration's announced that depositors of Silicon Valley Bank (SVB) will have access to their money, has given hope, said Nasscom's Senior Vice President
The apex IT industry body Nasscom on Monday said the US administration's stance on protecting depositors of Silicon Valley Bank that collapsed, is "reassuring" for Indian startups who have funds in that bank.
The announcement by Biden administration's that depositors of Silicon Valley Bank (SVB) will have access to their money, has given hope, said Nasscom's Senior Vice President and chief strategy officer Sangeeta Gupta reported PTI.
It will address the immediate financial issues that Indian startups were grappling with, she added.
Silicon Valley Bank, the16th largest bank in the United States, was closed on Friday by the California Department of Financial Protection and Innovation which later appointed the US Federal Deposit Insurance Corporation (FDIC) as its receiver.
SVB was deeply entrenched in the tech startup ecosystem and the default bank for many startups; its abrupt fall marked one of the largest bank failures since the 2008 global financial crisis.
The bank failed after clients, many of the venture capital firms and VC-backed companies began pulling out their deposits, creating a run on the bank.
"The statement (issued by the Department of the Treasury, Federal Reserve, and FDIC) is reassuring for Indian startups who had funds invested in SVB, and will address immediate financial issue they were grappling with," Nasscom's Gupta said.
Gaurav VK Singhvi, Co-Founder at We Founder Circle, noted that over the years, SVB has been a reliable and go-to bank for many Indian SaaS (Software as a Service) and Y Combinator-backed startups owing to its versatility, adaptability and convenience of fundraising activities, reported PTI.
"... the news of its sudden collapse came as a surprise to many, forcing many startups to transfer their accounts to different banks, however, the jitters of its downfall will have a limited impact on Indian startups both directly and indirectly," Singhvi said.
"Wwe must also recognise that SVB's clients have been struggling for cash over the past year and with the restricted runway, the consequences could be hugely damaging if they do not withdraw their cash on time for payroll and other operational purposes", Singhvi added.
Established in 2020 in Mumbai, We Founder Circle (WFC) is a global community of founders and strategic angels that have come together to push the startup industry and steer it towards robust growth path.
WFC provides seed funding, business development, and global networking opportunities to startups as it believes early-stage ventures need a lot beyond just financial support to become scalable and stable. It has already enabled USD 20 million worth of investments across 100-plus startup deals since incorporation.