Southeast Asia VC firms more impacted from SVB fallout than startups

SINGAPORE — Compared to startups, venture capitalists in Southeast Asia could see a bigger impact from the collapse of Silicon Valley Bank, as it will be difficult to find a replacement for the state-based bank. united in the region.

“I think from a venture capitalist’s perspective, you’ll see a bigger impact here,” Jungle Ventures managing partner David Gowdey told CNBC.Squawk Box Asia.”

“It’s really because the local banks here don’t provide the same products and services as SVB,” Gowdey said on Tuesday, adding that SVB was Jungle Ventures’ main bank.

While SVB served tech startups and venture capital firms primarily located in the US or with a US presence, some Southeast Asia-based VCs – such as Jungle Ventures and Golden Gate Ventures – were also clients of SVB.

The bank provided venture capital firms and startups with access to the US capital market as well as networking opportunities in the United States.

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SVB has served and built a very strong product offering for venture capitalists, Gowdey said, adding that Jungle Ventures will now likely have to “look for a Big Four player in the United States to be our partner.”

As for replacing some of the features SVB provides in the US, it’s “going to be difficult,” Vinnie Lauria, managing partner of Golden Gate Ventures, told CNBC.Asia street signs” Tuesday.

“We were a customer of SVB, so we understand the added value very well,” Lauria said.

Lauria clarified that less than 1% of Golden Gate Ventures’ entire portfolio had done business with SVB. For Golden Gate-backed companies that have done business with SVB, they have not engaged in full banking services with the US bank, he said.

SVB crisis: Southeast Asia now looks like a 'golden child' to US investors, venture capital firm says

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 United States,” he added.

While both companies had exposure to SVB, only one had material exposure, Gowdey said, adding that the company that had material exposure engaged SVB for payroll services.

As for startups in Southeast Asia, venture capitalists say they unlikely to be affected by contagion from the Silicon Valley Bank collapse.

“The reality is that here in Southeast Asia, a lot of startups were really buffered. Most didn’t do business with Silicon Valley Bank,” said Lauria of Golden Gate Ventures.

“So the reality is that Southeast Asia is already very isolated from what was happening in Silicon Valley,” he said.

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