Union minister Rajeev Chandrasekhar is this week meeting Indian startups affected by the abrupt closure of troubled Silicon Valley Bank (SVB) to understand the impact and offer government help to overcome the crisis. (ALSO READ: Silicon Valley Bank collapse: What we know so far about failed US lender)
“The SVB Financial shutdown is certainly disrupting startups worldwide. Startups are an important part of New India’s economy. I will be meeting with Indian startups this week to understand the impact on them and how Narendra Modi’s government can help during this crisis. ” stated the union minister for skill development, entrepreneurship and electronics and information technology in a tweet.
Told that the Indian financial sector is resilient under PM Modi and took a dig at Congress, Minister Chandrasekhar continued: “SVB’s financial collapse in the US is in stark contrast to India’s stable and strong financial sector, which Prime Minister Narendra Modi has rebuilt from his comrade NPA bailout devastating under the Congress lost decade to a strong, growing catalyst for the New India Economy today.”
How SVB failure affects India’s startups?
Silicon Valley Bank is the largest lender to some of the largest technology companies in the world. This includes a number of Indian startups that have defaulted on their 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. Probably true for founders in other countries as well.”
“From what I hear, SVB was the only bank that would bank a Delaware C Corp with founders who did not have an 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 Collapses
California regulators shut down the US lender and placed it into receivership, sending shockwaves across the global financial market. This happened after SVB’s failed share sale attempt, and startups began withdrawing funds at the urging of venture capital firms. The fiasco is being described as the biggest financial institution failure since the collapse of Washington Mutual in 2008 at the height of the financial crisis.