Union Minister Rajeev Chandrasekhar will meet this week with Indian startups affected by the abrupt closure of troubled Silicon Valley Bank (SVB) to understand the impact and offer government assistance in overcoming the crisis. (ALSO READ: Silicon Valley Bank collapse: What we know so far about failed US lender)
“The SVB Financial closure is certainly disrupting startups across the world. Startups are an important part of the New India economy. I will meet with Indian startups this week to understand the impact on them and how Narendra Modi’s government can help during this crisis,” the union minister of state for skill development, entrepreneurship, and electronics and information technology informed in a tweet.
Telling that the Indian financial sector is resilient under PM Modi and taking a dig at Congress, minister Chandrasekhar continued, “The SVB Financial collapse in US sharp contrast with India’s stable and strong financial sector, which PM Narendra Modi, has rebuilt from its crony NPA ridden destructing during Congress lost decade to a strong, growing catalyst of the New India Economy today.”
How does SVB failure affect India’s startups?
Silicon Valley Bank is the largest lender to some of the largest tech companies in the world. This includes a number of Indian startups that have been exposed to its investments and may now be stuck with the funds raised.
SVB had exposure to at least 21 startups in India, according to recent data from market intelligence platform Tracxn, though the amount invested in these startups is unknown.
Gokul Rajaram, a board member at Pinterest and Coinbase, writes, “India-based founders don’t know who to turn to as an alternate to SVB. Likely true for founders in other countries too.”
“From what I hear, SVB was the only bank that would bank a Delaware C Corp with founders who didn’t have a SSN. Unique, tech-forward bank. Shame what’s happening,” he wrote in a Twitter post.
ALSO READ: Silicon Valley Bank collapse: Here’s why it’s not 2008 again
Silicon Valley Bank collapse
California regulators shut down the US lender and placed it in receivership, sending shockwaves throughout the global financial market. This occurred following SVB’s failed share sale attempt, and startups began withdrawing funds at the urging of venture capital firms. The failure is being described as the largest financial institution failure since the 2008 Washington Mutual collapse at the height of the financial crisis.