Top VCs in a huddle to discuss Silicon Valley Bank collapse, vow to be ‘supportive’

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.

ETtech in-depth: Silicon Valley Bank meltdown puts Indian SaaS firms on alert

The events that unfolded over the past 48 hours have been “deeply disappointing and concerning”, they said, adding that “in the event that SVB were to be purchased and appropriately capitalised, we would be strongly supportive and encourage our portfolio companies to resume their banking relationship with them.”

Tweeting the statement, Hemant Taneja, CEO, General Catalyst, said: “Several VC leaders met today to discuss the aftermath of SVB’s downfall. This is a joint statement from all of us.”

Discover the stories of your interest

ET on Friday reported that Indian investors and SaaS startups are rattled by the developments in the US. While some are closely tracking the developments, others have started moving their deposits out from SVB.

ETtech explainer: how rising US interest rates caused a pincer movement on Silicon Valley 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 told ET. New-age lenders Mercury and Brex have come up to be platforms of choice for most early-stage SaaS startups.

Late Friday, the US Federal Deposit Insurance Corporation (FDIC) said that SVB was closed by the California Department of Financial Protection and Innovation.

Also read | How Silicon Valley Bank served the tech industry and beyond

“To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank,” it said.

The FDIC will sell the assets of SVB, while the DINB will maintain its normal business activities. While the insured depositors of SVB will receive their insured deposits, the uninsured depositors in the bank will be paid dividends from the asset sale.

The bank’s global fund loan banking book was comprised of 56% of loans to venture capital and private equity firms as of the end of last year, as per a Bloomberg report.