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Southeast Asia VC firms are more affected by SVB fallout than start-ups




  • While SVB served technology startups and venture capital firms that are mostly 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 don̵[ads1]7;t offer the same product and services that SVB offers,” David Gowdey, managing partner of Jungle Ventures, said on CNBC’s “Squawk Box Asia.”

SINGAPORE — Compared to startups, 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 challenging.

“I think from a VC firm’s perspective, you’ll 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 offer the same product and services that SVB offers,” Gowdey said Tuesday, adding that SVB was Jungle Ventures’ primary bank.

While SVB served technology startups and venture capital firms that are mostly 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 gave VC firms and startups access to the US capital market as well as networking opportunities in the US

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SVB earned 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.”

In terms of replacing some of the features that SVB offers 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 gone to SVB. For those companies backed by Golden Gate that banked with SVB, they did not engage in full banking services with the American 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 US,” 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 be hit by the contagion from the collapse of Silicon Valley Bank.

“The reality is that here in Southeast Asia, a lot of the startups were really buffered. Most didn’t bank with the 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.



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