Silicon Valley Bank collapse | top developments so far

Nearly 60 YC-backed Indian startups have deposits stuck in Silicon Valley Bank: The spillover of the collapse into India’s startup ecosystem is becoming more evident, with several early and mid-stage ventures that were banking with the California-based lender finding themselves in a cash crunch for daily expenses such as payroll transactions.

These particularly include startups backed by the famed Silicon Valley accelerator Y Combinator (YC). At least 40 YC-backed Indian startups have $250,000 to $1 million in deposits with SVB, while more than 20 of them have deposits of more than $1 million, according to people in the know.

As Silicon Valley Bank crash hits home investors, fintechs help cash-crunched Indian startups: Top venture investors as well as larger fintech firms such as Razorpay are among those stepping up to provide emergency services to small and mid-stage startups roiled by the abrupt closure of industry lender Silicon Valley Bank in the US on Friday.

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In addition, investors who have backed the affected startups are advising them to open alternate bank accounts on an urgent basis to receive customer payments and improve their liquidity positions.

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Elon Musk says he is open to buying collapsed Silicon Valley Bank: Twitter CEO Elon Musk on Saturday said he is open to the idea of buying the collapsed Silicon Valley Bank (SVB) and turning it into a digital bank. Min-Liang Tan, cofounder and CEO of Razer (a consumer electronic company), tweeted: “I think Twitter should buy SVB and become a digital bank”. To which Musk replied: “I’m open to the idea.”

Top VCs in a huddle to discuss Silicon Valley Bank collapse, vow to be ‘supportive’: In the aftermath of the Silicon Valley Bank (SVB) collapse, top venture capitalists said that they would be “strongly supportive” of the lender. In a joint statement, leading VC firms said that for 40 years, SVB has been an important platform “that played a pivotal role in serving the startup community and supporting the innovation economy in the US”.

The statement was signed by Accel, Altimeter Capital, B Capital Group, General Catalyst, Gil Capital, Greylock Partners, Khosla Ventures, Kleiner Perkins, Lightspeed Venture, Partners, Mayfield Fund, Redpoint Ventures, Ribbit Capital, and Upfront Ventures.

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Extinction-level event for startups, says YC president Garry Tan: Garry Tan, president at Silicon Valley-based Y Combinator, said the collapse of SVB in the US is an ‘extinction-level event’ for startups and will set startups and innovation back by 10 years or more.

Y Combinator, popularly known as YC, has been an early investor in firms like Stripe, Airbnb, and others. Its portfolio firms work closely with the SVB which has now been taken over by the US government. Razorpay, Zepto, and Meesho are among its biggest India portfolio firms.

“BIG TECH will not care about this. They have cash elsewhere. All little startups, tomorrow’s Google’s and Facebooks, will be extinguished if we don’t find a fix, ” Tan tweeted as the news broke about the failure of SVB.

(Graphics & illustrations by Rahul Awasthi)