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