From Shanghai to Mumbai, tech firms grapple with Silicon Valley bank collapse

[March 13, 2023](Comprehensive report by Epoch Times reporter Zhang Ting)Silicon Valley BankHalf a world away, tech executives in Asia are scrambling to assess and respond to the potential fallout from the event.

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According to Bloomberg News, people familiar with the matter disclosed that as major investors and sovereign funds rushed to check their portfolios and investeesSilicon Valley Bankexposure, the collapse sent shockwaves through Asia.

Silicon Valley Bank quickly collapsed last Friday (March 10). At an investment firm backing ByteDance, executives were glued to screens in Beijing on Thursday night, monitoring Silicon Valley Bank’s stock price and news headlines before deciding overnight to pull their money out of the bank, Bloomberg said.

An Indian company founder told Bloomberg News that he has not been able to get back the company’s funds and now only has working capital (working capital). Other founders are busy preventing customers from transferring money to the company’s Silicon Valley Bank account and working out new arrangements for company salary payments. The three founders and a startup investor say they haven’t slept for 48 hours.

The latest news of the March 10 collapse of Silicon Valley Bank was a major topic of conversation among financiers and entrepreneurs gathered in the Shangri-La Hotel ballroom at an event in Singapore.financial capital of indiaMumbaiAt one meeting, founders and investors of many startups were talking about nothing but which fledgling company might go down first.

“I wonder how many of you spent all night last night reading what happened with Silicon Valley Bank and listing the implications?” Alp Ercil asked at the event in Singapore . A large group of people at the scene raised their hands in response to his question.

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Ethier’s Hong Kong-based Asia Research & Capital Management firm controlled $3.5 billion in assets as of January.

Sources told Bloomberg that Asia’s largest funds, including Sequoia Capital China, Temasek Holdings Pte, ZhenFund and Yunfeng Fund, are in talks with their portfolio companies. contacts to measure their exposure to SVB.

A representative for Sequoia Capital China told Bloomberg the firm was not immediately available for comment, while ZhenFund did not respond to a request for comment outside business hours. Temasek said it did not have any direct exposure to SVB.

Yunfeng Fund said it had notified various teams to conduct a rapid internal investigation into the potential risks of Silicon Valley Bank and warned portfolio companies to take actions to avoid risks. Yunfeng itself has no savings in Silicon Valley Bank.

“The impact of the SVB incident on the tech sector should not be underestimated,” analysts led by China International Capital Corporation’s Liu Zhengning said in a note. Deposits are crucial for tech start-ups, they said , as they typically require large amounts of cash to cover huge expenses including R&D expenses and employee salaries.

“If these cash deposits ultimately have to be damaged in bankruptcy or restructuring, some technology companies could face a high degree of cash flow strain,” the analysts said. “The risk of bankruptcy should not be ruled out.”

China’s domestic media “First Financial Daily” quoted an industry insider as saying that some Chinese start-ups lost hundreds of millions of yuan due to the collapse of Silicon Valley Bank.

Andy (pseudonym), an entrepreneur of a Chinese medical start-up company, sent a WeChat in Moments at noon on March 11: “I didn’t expect to wake up and catch up with the bank collapse, and my life was complete.” Most of his company’s US dollar assets Both exist in Silicon Valley Bank, which is mainly used for the salary payment of office workers in the United States.

Many investors also confirmed that Chinese companies go public in the United States with a VIE structure, especially for entrepreneurs who use US dollar venture capital funds as a VIE structure. Silicon Valley Bank is the only choice for Chinese start-up companies to store assets overseas.

Silicon Valley Bank’s localization department in China seems to have not been affected for the time being. Silicon Valley Bank first began operating in China in 1999, according to its website. In 2012, it was linked toShanghaiThe Shanghai Pudong Development Bank formed a joint venture, the first Sino-US joint venture bank to receive a license since 1997.

existShanghaiSilicon Valley Bank’s local partners and joint ventures issued memos within hours of trying to calm concerns about its financial stability.

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Silicon Valley Bank’s problems are of particular concern in China, people familiar with the matter told Bloomberg, because the joint venture has been aggressive in lending to start-ups and funds that cannot borrow from traditional banks.

Editor in charge: Li Qiong #