SINGAPORE — Compared to startups, Southeast Asia’s enterprise capital companies may see an even bigger affect from the collapse of Silicon Valley Bank as a result of discovering a substitute for the U.S.-based financial institution within the area will likely be difficult.
“I think from a VC firm’s perspective, you will see a bigger impact here,” stated David Gowdey, managing accomplice at Jungle Ventures, instructed CNBC’s “Squawk Box Asia.”
“That’s really because the local banks here aren’t providing the same product and services that SVB provides,” Gowdey stated Tuesday, including that SVB was Jungle Ventures’ major financial institution.
While SVB served tech startups and enterprise capital companies largely positioned within the U.S. or have a presence within the U.S. Some VCs primarily based in Southeast Asia — similar to Jungle Ventures and Golden Gate Ventures — have been additionally purchasers of SVB.
The financial institution supplied VC companies and startups entry to the U.S. capital market in addition to networking alternatives within the U.S.
SVB served and constructed a really robust product providing for VC companies, stated Gowdey, including that Jungle Ventures will now in all probability need to “look for a Big Four player in the U.S. to be our partner.”
In phrases of changing a number of the options that SVB offers within the U.S., it’s “going to be hard,” stated Vinnie Lauria, managing accomplice at Golden Gate Ventures, on CNBC’s “Street Signs Asia” on Tuesday.
“We were a client of SVB so we understand the value-add very well,” stated Lauria.
Lauria certified that lower than 1% of Golden Gate Ventures’ whole portfolio had banked with SVB. For these firms backed by Golden Gate that banked with SVB, they didn’t have interaction full banking providers with the U.S. financial institution, he stated.
Only two firms in Jungle Ventures’ portfolio of greater than 70 startups had publicity to SVB, stated Gowdey.
“That was really because [these two companies] had operations in the U.S.,” he added.
While the 2 firms had publicity to SVB, just one had materials publicity, stated Gowdey, including that the corporate that confronted materials publicity had engaged SVB for payroll providers.
As for startups in Southeast Asia, VC companies say they won’t doubtless be hit by the contagion from the collapse of Silicon Valley Bank.
“The reality is, here in Southeast Asia, a lot of the startups were really buffered. Most did not bank with Silicon Valley Bank,” stated Lauria from Golden Gate Ventures.
“So the reality is, Southeast Asia is already very isolated from what was happening in Silicon Valley,” he stated.