The collapse of Silicon Valley Bank (SVB) has sent shockwaves through the Indian start-up community, prompting Union Minister of State for Electronics and IT Rajeev Chandrasekhar to meet with representatives to discuss the impact and explore ways the government can help.
“A few start-ups have reached out to me, and there is a general worry. Prime Minister Narendra Modi’s vision of India’s ‘techade’ has a big role for the success of our start-ups and innovation ecosystem. We want to be supportive of our young Indians in whatever way we can. We won’t let the SVB failure slow their growth,” Chandrasekhar informed the press.
SVB, which as of December 2022 had $209bn in total assets and about $175bn in total deposits, has a large number of Indian start-ups as customers, particularly in the SaaS (Software as a Service) sector that services US clients. The bank's crisis has caused turmoil in global markets, with depositors unlikely to get their money out anytime soon.
The collapse of the bank has raised concerns about the future of India's 'techade', which has a big role to play in the success of start-ups and innovation. Several ultra high-net-worth individuals (UHNWI) in the technology space have also been affected.
According to a poll run on the WhatsApp group of Indian founders whose start-ups were incubated by the US-based technology start-up accelerator YCombinator (YC), a majority of the founders said they had more than $250,000 with SVB, with some having parked more than $1m in their SVB accounts.
The Federal Deposit Insurance Corporation (FDIC) has said that depositors will have access to their insured deposits, capped at $250,000, by Monday 13 March. However, data submitted to the FDIC by the bank at the end of 2022 showed that 89% of its $175bn in deposits were uninsured.
Chandrasekhar's meeting with representatives of the affected start-ups comes as the Indian government seeks to support its young entrepreneurs in whatever way it can to ensure that the SVB failure does not slow their growth.