How Indian startup founders are reacting to the SVB meltdown

The Friday development has shocked the tech industry across the world, as tech unicorns and SaaS startups were the biggest customers of SVB.

The US lender in all had $209 billion in total assets and around $175.4 billion in total deposits, as of December last year. SVB had exposure in 21 start-ups in India, though the amount of investment is not clearly mentioned, per the latest Tracxn data.

SVB’s abrupt demise – the biggest in more than a decade – has left legions of Silicon Valley entrepreneurs in the lurch and livid.

While some are tracking the developments closely, others have started moving their deposits out from the US-based bank. “We moved 90% of our money from SVB to Brex in the first half of Thursday–I did it even before recommendation of VC funds,” Lightspeed-backed Rephrase.ai founder and CEO Ashray Malhotra was quoted as saying by The Economic Times.

Snapdeal Co-founder Kunal Bahl said SVB lent them money in 2012, when the business was grappling with a cash crunch.

“In 2012, in the midst of pivoting our business model…we found ourselves in a cash crunch as investors weren’t convinced we could pull it off.” “SVB extended a small debt line to us that kept us going,” he tweeted.

‘Tough times ahead’

Zoho’s Sridhar Vembu predicted “tough times ahead”. “Silicon Valley Bank’s sudden collapse reminds us of the fragile foundation of bubble-fueled prosperity the world saw when valuations and net worth appeared to reach insane heights overnight,” he wrote. “They can disappear overnight too.”

Paytm boss Vijay Shekhar Sharma recalled how SVB was one of his first investors. “Long back, by selling to other private investors, SVB exited fully with handsome returns on their total investment of only $1.7 million. “They neither are a current shareholder (in Paytm) nor invested the amount given here.”

‘Some startups could be at risk of losing big money’

Mumbai-based Verak Insurance CEO Rahul Mathur said his company was among those affected. “> 60% of YC (Y Combinator)-backed companies have > $250K in SVB bank accounts,” he tweeted. “FDIC (Federal Deposit Insurance Corporation) limit is $250K. Some startups could be at risk of losing big money,” he said.

SVB collapsed on Friday in the largest US bank failure since the 2008 financial crisis, roiling global markets and stranding billions of dollars belonging to companies and investors.

California banking regulators closed the bank and appointed the Federal Deposit Insurance Corporation (FDIC) receiver. The FDIC will dispose of its assets.