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MUMBAI: India’s state technology minister said on Sunday he would meet startups this week to assess the impact on them of the collapse of Silicon Valley Bank, as concerns arose about the consequences for India’s startup sector.
California banking regulators closed Silicon Valley Bank on Friday after a run by the lender, which had $209 billion in assets at the end of 2022, with depositors withdrawing as much as $42 billion in one day, rendering it insolvent.
“Startups are an important part of India’s new economy. I will meet Indian startups this week to understand the impact on them and how the government can help during the crisis,” Rajeev Chandrasekhar, the state’s IT minister, said on Twitter.
India has one of the world’s largest startup markets, with many clocking multibillion-dollar valuations in recent years and backed by foreign investors who have made bold bets on digital and other technology businesses.
SVB’s failure, the biggest in the US since the 2008 financial crisis, has rattled global markets, hit banking stocks and is now unsettling for Indian entrepreneurs.
The Silicon Valley bank is the biggest failure since the crisis of 2008, billions stuck
Two partners in an Indian venture capital fund and one lender to Indian startups said Reuters that they carry out checks with portfolio companies on any exposure to GMB and if so, whether it is a significant part of their total bank balance.
Consumer internet startups, which have attracted the majority of funding in India in recent years, are less affected because they either don’t have an SVB account or have little exposure to it, he said. r three people.
“Talked to some founders and it’s really bad,” Ashish Dave, CEO of Mirae Asset Venture Investments (India), wrote in a tweet.
“Especially for Indian founders… who set up their companies in the US and raised their seed round, SVB is a default bank. Uncertainty kills them. Some growth is relatively safer as they diversify. The last thing founders needed”.
India’s Nazara Technologies Ltd, a mobile gaming company, said in a stock exchange filing that two of its subsidiaries, Kiddopia Inc and Mediawrkz Inc, hold cash balances totaling $7.75 million or 640 million rupees with SVB.