- While SVB served tech startups and venture capital firms that are mainly located in the US or have a presence in the US, some VCs based in Southeast Asia – such as Jungle Ventures and Golden Gate Ventures – were also clients of SVB.
- Many VC firms in Southeast Asia may face challenges in finding another bank that offers the same product offering as the collapsed SVB, venture capital firms in the region say.
- “It’s really because the local banks here don’t provide the same product and services that SVB provides,” David Gowdey, managing partner at Jungle Ventures, said on CNBC’s “Squawk Box Asia.”
SINGAPORE — Compared to start-ups, Southeast Asia’s venture capital firms may see a bigger impact from the collapse of Silicon Valley Bank because finding a replacement for the US-based bank in the region will be a challenge.
“I think from a VC firm’s perspective, you’re going to see a bigger impact here,” David Gowdey, managing partner at Jungle Ventures, told CNBC’s “Squawk Box Asia.”
“It’s really because the local banks here don’t provide the same products and services that SVB provides,” Gowdey said Tuesday, adding that SVB was Jungle Ventures’ primary bank.
While SVB served tech startups and venture capital firms that are mainly located in the US or have a presence in the US, some VCs based in Southeast Asia – such as Jungle Ventures and Golden Gate Ventures – were also clients of SVB.
The bank provided VC firms and start-ups with access to the US capital market as well as networking opportunities in the US
SVB served and built a very strong product offering for VC firms, Gowdey said, adding that Jungle Ventures will now likely have to “look for a Big Four player in the US to be our partner.”
As for replacing some of the functions that SVB provides in the U.S., it’s “going to be difficult,” Vinnie Lauria, managing partner at Golden Gate Ventures, said on CNBC’s “Street Signs Asia” on Tuesday.
“We were a customer of SVB, so we understand the added value very well,” said Lauria.
Lauria qualified that less than 1% of Golden Gate Ventures’ entire portfolio had banked at SVB. For the companies backed by Golden Gate that banked with SVB, they did not engage full banking services with the US bank, he said.
Only two companies in Jungle Ventures’ portfolio of more than 70 startups had exposure to SVB, Gowdey said.
“It was really because (these two companies) had operations in the United States,” he added.
While the two companies had exposure to SVB, only one had material exposure, Gowdey said, adding that the company facing material exposure had engaged SVB for payroll services.
As for startups in Southeast Asia, VC firms say they are unlikely to suffer contagion from the collapse of Silicon Valley Bank.
“The reality is, here in Southeast Asia, a lot of the startups were really buffered. Most didn’t bank with Silicon Valley Bank,” said Lauria of Golden Gate Ventures.
“So the reality is that Southeast Asia is already very insulated from what happened in Silicon Valley,” he said.