SVB collapse unlikely to affect fundraising for Southeast Asian startups: VC

The collapse of US-based Silicon Valley Bank is unlikely to affect fundraising for tech startups in Southeast Asia, venture capitalists and an analyst told CNBC.

The bank served many venture capital firms and venture capital-backed startups. But last week, depositors rushed to withdraw their funds as panic over the bank’s financial health spread, leading to its collapse.

“I think [the impact on fundraising is] be careful, but I don’t think the contagion is spreading,” David Gowdy, managing partner at Southeast Asian venture capital firm Jungle Ventures, said on CNBC’s “Squawk Box Asia” on Tuesday.

“I think Secretary Yellen and the government have done a fantastic job of stepping in and removing a lot of that risk, creating a lot of stability in the markets,” he said. On Sunday, US officials, including Treasury Secretary Janet Yellen, announced plans to protect depositors at the bank.

Gowdey said SVB was the firm’s main bank, but added: “We pull a lot of that money into Southeast Asia, into banks in Singapore. So for us, the exposure to SVB was not big.”

Golden Gate Ventures, which also invests in Southeast Asian startups, said the fall of SVB was an opportunity for the region.

“It was actually beneficial for Southeast Asia. Now it looks like a golden child for American investors. Investors are starting to say: I want to diversify to different bank accounts, different geographies, different currencies,” Vinny Lauria, managing partner at Golden Gate Ventures, told CNBC’s “Street Signs Asia” on Tuesday.

“And here Southeast Asia has time to shine in the light of the situation,” Lauria added.

Asked if the situation made fundraising more difficult, Gowdey said funds in Southeast Asia were well capitalized.

“I think it’s selective because of the macro environment. [Accessing] capital is going to get harder, but the capital is there and it’s rolling out,” Gowdy said.

Venture capital firms previously told CNBC that economic uncertainty has made them pickier about investments in 2023.

“[In terms of] access to capital for tech entrepreneurs, venture capital firms will still be able to fund them,” Ray Wang, founder and chairman of Silicon Valley-based Constellation Research, told CNBC’s “Street Signs Asia” on Tuesday.

“But it’s the question of getting bank loans, having working capital, being able to actually manage the operations and having a bank that understands how a tech company or a biotech company works.” That’s really what’s being lost here,” Wang added.