Silicon Valley Bank collapse: Minister Chandrasekhar to meet Indian startups

As the collapse of Silicon Valley Bank (SVB) in the US left the Indian startup ecosystem worried, Union Minister of State for Electronics and IT, Rajeev Chandrasekhar, on Sunday said he will hold a meeting with the startup Founders and CEOs next week to see how the government can help them during the crisis.

The bank’s collapse is going to impact several startups in India which have exposure to its investments and have parked their funds in the bank.

“The @SVB_Financial closure is certainly disrupting startups across the world. Startups are an important part of #NewIndia Economy,” Chandrasekhar said in a tweet.

The minister said he will meet with the Indian startups next week “to understand the impact on them and how the Narendra Modi government can help them “during this crisis.”

According to recent data by global software-as-a-service (SaaS)-based market intelligence platform Tracxn, SVB had exposure in at least 21 startups in India although it did not reveal the size of the investment in these startups.

Top venture capitalist (VC) firms have also issued a joint statement on the collapse of SVB, one of the largest US banks serving the global startup community, saying they are “deeply disappointing and concerning”.

According to reports, SVB was a bank to more than 2,500 venture capital firms, including Lightspeed, Bain Capital and Insight Partners.

On Friday, the US Federal Deposit Insurance Corporation (FDIC) took control of the SVB’s $175 billion in customer deposits.

US-based technology startup accelerator Y Combinator, which has invested in thousands of startups, including at least 200 from India, has written a petition to US Treasury Secretary Janet Yellen and others, asking them to prevent further shockwaves that could lead to financial crisis and layoffs of more than 100,000 workers.

Over 1,200 CEOs and founders representing over 56,000 employees have already signed the petition, written by Garry Tan, CEO and President of Y Combinator, to save startups and hundreds of thousands of jobs.

Besieged SVC Bank in India threatens legal action

Hours after the crisis affecting the Silicon Valley Bank (SVB), the US, hit the headlines, panic gripped customers of a 116-year-old Mumbai-based entity, the SVC Bank.

Scores of customers flooded the SVC Bank — earlier known as ‘Shamrao Vithal Cooperative Bank’ — wanting to know the status and safety of their deposits.

Hoping to allay their clients’ apprehensions, the SVC Bank issued a statement late on Saturday pointing to the case of a ‘mistaken’ identity and clarifying that it had no links with the SVB, USA, and even threatened legal action against mischief mongers.

Among them were an anxious Twitteratti who asked: “@SVC_Bank: Heard rumours about bank default, please confirm”.

The SVC Bank reply was: “You have got the Twitter handle wrong. We are SVC Bank, erstwhile Shamrao Vithal Cooperative Bank, one of the leading & strongest cooperative banks in India with a legacy of 116 years. We have no relation to Silicon Valley Bank”.

The SVC Bank added that it is an Indian multi-state scheduled urban cooperative bank which operates only in India.

“It has proven, robust and strong fundamentals with a total business of over Rs 31,500 crore and a Net Profit of over Rs 146 crore (FY21-22),” the bank said.

It urged its members, customers and other stakeholders not to pay attention to baseless rumours and mischief-mongering by unscrupulous elements insinuating similarities in brand names.

“SVC Bank reserves the right to take due legal action on rumour mongers for tarnishing its brand image,” the bank threatened.