Image used for illustrative purposes only. (Express Illustrations)
BENGALURU: Since depositors have been allowed to withdraw their funds from the collapsed Silicon Valley Bank (SVB) from Monday, according to reports, start-ups in India have so far withdrawn close to $300 million from the bank.
The reports said start-ups have processed somewhere between $250 million and $300 million in past 24 hours. However, a couple of venture capitalists and start-up founders that this newspaper spoke to said $300 million seems to be a huge amount. Instead of withdrawing the whole amount, they could withdraw a certain amount and deposit it in another bank in the US or park it in India, said a start-up founder.
Many Indian SaaS (Software-as-a-service) start-ups have their deposits with SVB, which was considered a key lender for start-ups. Mobile gaming platform Nazara Technologies’ step-down subsidiaries - Kiddopia and Mediawrkz- hold about `64 crore cash balances at SVB, and the firm said on Wednesday they have been given unrestricted access to the entire amount.
“From this amount, a sum of Rs 60 crore has been transferred to bank accounts outside of SVB and a balance amount Rs 4 crore remains in SVB accounts for unrestricted operational use,” it said in a regulatory filing. Ruchit Garg’s Harvesting Farmer Network (HIN) has deposits at SVB. He told TNIE that they have over $250,000 deposits and that he could log in to the network and everything seems to be fine.
HFN is an agriculture technology platform, and Garg stressed on diversifying funds instead of parking in one bank. Sanjay Swamy, Managing Partner at Prime Venture Partners, said, “All our companies banking with SVB have been able to move 100% of their money out of SVB to other US-based banks.” “Several Indian IT services businesses and SaaS firms are dependent on the BFSI sector in the US. If the regional banks are impacted, they would definitely look to cut costs and IT services would be the first expenses that get cut,” said Ramit Arora, co-founder and President at Biz2X, a digital lending SaaS platform.
Start-ups withdraw $300 million in 24 hours
Reports say that start-ups have processed somewhere between $250 million and $300 million in the past 24 hours. However, a couple of venture capitalists and start-up founders that this newspaper spoke to said $300 million seems to be a huge amount.
