Collapse of Silicon Valley Bank shakes startup ecosystem in India

MUMBAI: The collapse of Silicon Valley Bank (SVB) has sent tremors in the Indian startup industry with many companies pulling out money from the bank and transferring it to other banks. In over two-decade-long operations in India, the 16th largest bank in the US became a trusted name for startups. The bank has made many high-ticket investments in Indian startups and provided funds to them when other lenders refused.

Paytm, InMobi, Carwale, Bluestone, Shaadi and Sarva are among some of the major names in India that benefitted from SVB’s funding. As per research firm Tracxn, SVB made investments in over 20 companies after starting operations in India in 2003. It has provided debt capital to domestic, venture-backed, early and midstage, high-growth companies in the country.

Many well-known figures in Indian startups have lamented the fall of SVB. Founder and CEO of Paytm Vijay Shekhar Sharma on Saturday said SVB helped the company to grow. He, however, clarified that SVB is not a shareholder of Paytm. “Silicon Valley Bank was one of my first investors when @AshLilani supported us in the first round of investments at One97."

"Thanks to him, we grew from a telco VAS company to what we are today,” tweeted Sharma. “Long back, by selling to other private investors, SVB exited fully with handsome returns on their total investment of only $ 1.7 million.”

“The shockwaves could have a limited impact on Indian startups,” said Gaurav VK Singhvi, co-founder at We Founder Circle. “However it is still being advised to not withdraw deposits from the bank which makes sense as banks operate on limited reserves,” he said. Snapdeal’s Kunal Bahl said SVB lent them money in 2012 when the business was grappling with a cash crunch.