Collapse of Silicon Valley Bank to impact Indian startup ecosystem, feel experts
Washington (PTI): The collapse of Silicon Valley Bank, the largest vendor in the startup ecosystem, is likely to adversely impact the Indian startup scenario as well as it has injected a lot of uncertainty in the sector overnight, industry experts say.
"Hopefully the matter will get resolved, but I think it is a big hit for Indian startups," Ashu Garg, a prominent Silicon Valley-based venture capitalist and early-stage investor for over two decades, told PTI in an interview.
California-based Silicon Valley Bank (SVB), the 16th largest bank in the United States, was closed on Friday by the California Department of Financial Protection and Innovation which later appointed the Federal Deposit Insurance Corporation (FDIC) as its receiver.
The FDIC, in a statement, said as of December 31, 2022, the Silicon Valley Bank had approximately USD 209.0 billion in total assets and about USD 175.4 billion in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The number of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.
"The reality is that the Silicon Valley Bank has been a real supporter of the Indian startup scene and has provided banking services. Most Indian startups that do business in the US use this bank because it is one of the few institutes willing to work with the Indian banks. A lot of the banking institutes do not want to work with overseas customers," Garg, an alumnus of IIT Delhi, said.
"So, SVB has been able to work with the Indian companies that do not have US employees. So if they (are gone), it will be very problematic for the Indian (companies)," he said in response to a question.
Over the past several years, SVB has been one of the most preferred choices of banking for startups and tech industry in the Silicon Valley, mainly because of its understanding of the industry and flexibility in many aspects suiting the startup ecosystem.
Given that every third startup in the Silicon Valley is founded by Indian-Americans, experts feel a significantly large number of these founders would be impacted as early as next week in terms of even making basic payments and giving paychecks to their employees.
Similarly, a large number of Indian startups which do not have even an employee or an office in the US had opened up their accounts in the Silicon Valley Bank as it let them do so without much regulatory questions and with a customer-friendly approach.
The implications of the collapse of SVB on Indian-Americans and their companis are very serious, Garg said.
"The Silicon Valley Bank is the largest vendor to the startup ecosystem. So now you have all these loans. You do not know what is going to happen if the loans get sold and get called.
"Besides, a lot of fintech also depends on the Silicon Valley Bank... So you probably saw Rippling, which is a payroll company, unable to issue payroll because their underlying bank is the Silicon Valley Bank. It also has potential implications for the banking system in the US and the rest of the world," the venture capitalist said.
A group of Silicon Valley-based venture capitalists after a meeting to discuss the aftermath of the bank's downfall said the events that unfolded over the past 48 hours have been deeply disappointing and concerning.
"In the event that SVB was to be purchased and appropriately capitalised, we would be strongly supportive and encourage our portfolio companies to resume their banking relationship with them," it said in a joint statement released by Indian-American Navin Chaddha, an early stage investor.
" SVB has been an early partner for many of our companies at Battery Ventures through the ups and downs of company building. The last 48 hours unfolded in ways we could have never imagined, but now is the time to back our partners and we strongly support our companies working with SVB as and when we have more clarity on their path forward," he said.
Indian-American Congressman Ro Khanna, who represents Silicon Valley in the House of Representatives, said the FDIC needs to investigate short sales over the past few months by executives, and at minimum, there should be a clawback with penalties of profits made.
"This should go to non-profits like Sunnyvale Community Services who are worried about losing SVB deposits and paying mortgages," he demanded.
Indian-American presidential candidate Vivek Ramaswamy said the American taxpayers should not bail out the likes of Prince Harry and Meghan Markle.
"If you want to make deposits at the Silicon Valley Bank, that is your business. But I did not hear the tech industry's intelligentsia calling for bailouts of East Palestine last month," he said.
Meanwhile, Indian-American Rohit Chopra, the director of the Consumer Financial Protection Bureau, is tasked with protecting the consumers interest in the case. He is also one of the FDIC directors.
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Abhishek sets 60,000 victory margin target for Mamata, warns cadres against complacency
Kolkata (PTI): The TMC on Sunday held an organisational meeting in Chief Minister Mamata Banerjee’s home turf Bhabanipur, where party national general secretary Abhishek Banerjee set an ambitious target of ensuring her victory by more than 60,000 votes in the 2026 West Bengal assembly elections.
The meeting assumes significance as Bhabanipur, long regarded as Mamata Banerjee’s political backyard, is expected to witness a high-profile contest in the upcoming election with the BJP fielding Leader of Opposition Suvendu Adhikari against her.
Addressing a closed-door workers’ conference at Ahindra Mancha in Chetla, along with Mamata Banerjee, her nephew Abhishek told booth-level leaders and party functionaries that Bhabanipur must emerge as the top-performing constituency in Kolkata, according to TMC sources.
“Bhabanipur must come first in Kolkata. Mamata Banerjee has to win by more than 60,000 votes,” he said, warning party cadres not to be complacent despite the constituency’s reputation as a TMC stronghold.
The meeting, attended by local councillors, booth workers and organisational leaders, was part of the party’s effort to strengthen its booth-level machinery in the constituency ahead of the assembly polls.
Among those present were state TMC president Subrata Bakshi, Kolkata Mayor Firhad Hakim, south Kolkata district president Debasish Kumar and councillors from the area.
Abhishek, considered number 2 in the TMC hierarchy, reminded party workers that Bhabanipur has 287 polling booths and asked them to improve on the party’s earlier performance.
“When Mamata Banerjee contested here earlier, we won in 231 booths. This time we must cross that figure and ensure victory in at least 232 booths,” he said.
Calling on booth presidents to function as “vigilant guardians” of their respective polling areas, the TMC MP said internal differences within local committees should not affect the organisational effort.
“You may like some people in your booth committees and dislike others. But remember that Mamata Banerjee herself is fighting here. That makes our responsibility much greater,” he said.
Mamata Banerjee, who also addressed the meeting, raised concerns over recent administrative changes during the poll process and accused the Centre of interfering in the state’s functioning.
“In the last three days, 50 officers have been removed. If anything happens, Narendra Modi and Vanish Kumar will have to take responsibility,” she told workers.
The TMC supremo also referred to the Special Intensive Revision (SIR) of electoral rolls and said the party would extend legal assistance to voters who face problems.
“A supplementary list will be published tomorrow. If anyone’s name is deleted or they face difficulties, we will provide legal help,” she said.
According to party sources, the revision exercise has reportedly led to the deletion of around 47,000 names from the Bhabanipur electoral rolls, a development the TMC leadership is closely monitoring.
The constituency occupies a special place in Bengal politics. Mamata Banerjee had first represented Bhabanipur in the assembly before returning to the seat in 2011 through a bypoll after becoming chief minister.
In 2021, she again contested a by-election from Bhabanipur to retain the chief minister’s post after losing the high-stakes battle in Nandigram to Adhikari.
Though the seat has largely remained a TMC bastion, recent electoral trends have made the contest more closely watched. In the 2024 Lok Sabha polls, TMC candidate Mala Roy secured a lead of around 6,500 votes in the Bhabanipur segment, while the BJP gained ground in several municipal wards.
Against this backdrop, party leaders said Sunday’s meeting was aimed at ensuring there is “no room for complacency” in the constituency and that the organisational network remains fully mobilised for the upcoming electoral battle.
