Southeast Asia Venture Capital Firms Could See A Bigger Impact From SVB Collapse Than StartUps

Compared to startups, Southeast Asia’s venture capital firms could see a bigger impact from the collapse of Silicon Valley Bank because finding a relief for the U.S.- based bank in the region will be demanding.

I think from a Venture Capital firm’s perspective, you’ll see a bigger impact then,” said David Gowdey, managing partner at Jungle Ventures, told CNBC’s “ Squawk Box Asia.”

That’s really because the local banks then are n’t providing the same product 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 mainly located in the U.S. or have a presence in the U.S. Some Venture Capitals hung in Southeast Asia — similar as Jungle Ventures and Golden Gate Ventures — were also customers of SVB.

The bank provided Venture Capital enterprises and startups access to the U.S. capital market as well as networking chances in the U.S.

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SVB served and raised a very strong product offering for VC enterprises, said Gowdey, adding that Jungle Ventures will now likely have to “look for a Big Four player in the U.S. to be our partner.

In terms of replacing some of the features that SVB provides in the U.S., it’s “going to be hard,” said Vinnie Lauria, managing partner at Golden Gate Ventures, on CNBC’s “Street Signs Asia” on Tuesday.

We were a customer of SVB so we understand the value- add very well,” said Lauria.

Lauria qualified that less than 1 of Golden Gate Ventures’ all portfolio had banked with SVB. For those companies backed by Golden Gate that banked with SVB, they didn’t engage full banking services with the U.S. bank, he said.

Only two companies in Jungle Ventures’ portfolio of further than 70 startups had exposure to SVB, said Gowdey.

That was really because (these two companies) had operations in the U.S.,” he added.

While the two companies had exposure to SVB, only one had material exposure, said Gowdey, adding that the company that faced material exposure had engaged SVB for payroll services.

As for startups in Southeast Asia, Venture Capital enterprises say they won’t likely be hit by the contagion from the collapse of Silicon Valley Bank.

The reality is, then in Southeast Asia, a lot of the startups were really cushioned. Most didn’t bank with Silicon Valley Bank,” said Lauria from Golden Gate Ventures.

So the reality is, Southeast Asia is earlier very secluded from what was happening in Silicon Valley,” he said.


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