List Of Indian Startups That Have Exposure To The Collapsed Silicon Valley Bank

The collapse of Silicon Valley Bank (SVB) has put the focus on Y Combinator-backed Indian startups and what lies ahead for them in the near future. For the uninitiated, Y Combinator is an American technology startup accelerator company.

While the depositors have been given access to their money since March 13,which has given some relief to startups, the Treasury Department, the Federal Reserve, and the Federal Deposit Insurance Corporation have also assured in a joint statement that no losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

But the situation remains grim for startups that had exposure to Silicon Valley Bank, which includes some Indian startups as well.

Indian Startups With Exposure To SVB

indiatimes

Siddarth Pai, founding partner at Bengaluru-based 3one4 Capital, estimates Indian startups' exposure to SVB to be in the range of $2.5¨C3 billion, as per the TOI report. He added that Y Combinator backs some 250 Indian startups, 90¨C95 percent of which are based outside India.

SVB has reportedly invested in around 21 Indian startups, as per Tracxn data, but the exact investment amount is unclear. Other startups that raised funds from SVB include Bluestone, Carwale, and Loyalty Rewardz. Tracxn data, as per the Mint report, also shows that SVB has not made significant investments in Indian startups since 2011.

Here are the Indian companies that reportedly have funding from Silicon Valley Bank:

However, according to Paytm founder Vijay Shekhar Sharma, Silicon Valley Bank (SVB) has completely exited its investment in the company and received significant returns, despite investing only $1.7 million. Sharma has confirmed that SVB is no longer a shareholder in Paytm.

¡°This is to clarify that SVB has never been a lender to InMobi. It has never invested any money in InMobi in the past or nor at present," commented InMobi on reports that SVB been a lender to the firm. Though Abhay Singhal, the co-founder of InMobi Group ¨C backed by Softbank, expressed that the recent sale of securities at mark-to-market price causing a loss of $1.8 billion had alarmed the market.

Singhal shared his view with PTI on the impact of the SVB collapse, stating that it would have a short-term effect on funding for startups.

The situation is particularly difficult for startups backed by the Silicon Valley accelerator Y Combinator (YC), with at least 40 YC-backed Indian startups having between $250,000 and $1 million each in deposits with SVB, and over 20 of them having deposits of over $1 million each, The Economic Times quoted a YC WhatsApp poll as showing.

Fintech firm Recur Club founder and CEO Eklavya Gupta told PTI that there are some large, non-Y Combinator-linked SaaS companies on the west coast with operations in the US and India that have had significant exposure to SVB.

Larger YC-backed companies in India, such as Razorpay, Meesho, and Zepto, have no exposure to SVB. However, early-stage and mid-stage startups are seeing the impact of the bank's collapse. Some of the larger YC companies from India moved funds over the past two weeks, sensing a potential disruption.

Also Read: Hindenburg Trolled For Failing To Detect SVB Crisis

FDIC Announces SVB Closure

abcnews

Late on March 10, the US Federal Deposit Insurance Corporation (FDIC) said that SVB had been shut down by the California Department of Financial Protection and Innovation. The FDIC would sell the assets of SVB, and the Deposit Insurance National Bank of Santa Clara would maintain its normal business activities.

While the insured depositors of SVB will receive their insured deposits up to $250,000, the uninsured depositors in the bank will be paid dividends following the sale of the 40-year old bank's assets.

FDIC data also mentioned recently that US banks have about $620 billion in unrealized losses.

Union Minister Meets Indian Startups

The Union Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar, said a few days ago that he will meet with Indian startups this week to understand the impact and how the Narendra Modi government can help during this crisis.

The @SVB_Financial closure is certainly disrupting startups across world .

Startups are an imp part of #NewIndia Economy.

I will meet wth Indian Startups this week to understand impact on thm n how @narendramodi govt can help durng this crisis.#IndiaTechade @PMOIndia pic.twitter.com/1HLTwAs9IF

¡ª Rajeev Chandrasekhar ?? (@Rajeev_GoI) March 12, 2023

And today, Union Minister Rajeev Chandrasekhar met with startups and reassured them that the government is focused on helping startups navigate the crisis sparked by the collapse of Silicon Valley Bank.

Minister @Rajeev_GoI met with startups today and reassured them that the Government is focused on helping startups navigate the crisis sparked by the collapse of Silicon Valley Bank.https://t.co/FjbfVM1IOY

¡ª Chandra R. Srikanth (@chandrarsrikant) March 14, 2023

Great news for Indian startups! MoS @Rajeev_GoI had an excellent discussion with 450+ entrepreneurs, VCs, and stakeholders regarding the SVB bank crisis. It's refreshing to see our government taking proactive measures to address concerns.

Some points discussed in todays¡­ https://t.co/VHmixYIkFH pic.twitter.com/bcQhUFrKwj

¡ª Yashraj Akashi (YSA) (@yashrajx) March 14, 2023

Rajeev Chandrasekhar said that he held discussions with startups and industry representatives on key issues and shared how the government is laser-focused on ensuring that every startup navigates through this storm.

"The Indian banking system is trusted and robust, and startups must start using it," Chandrasekhar said, as per a Moneycontrol report.

During the meeting, it was proposed that the government work with banks and stakeholders to encourage the development of innovative credit products.

Also Read: 15 Commonly Used Startup Terms

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