Silicon Valley Bank jitters likely to be felt among Indian start-ups

The company has investments in close to 21 start-ups in India

The crisis at Silicon Valley Bank (SVB), which is in talks on sale after efforts to raise capital failed, may have consequences for the Indian start-up world.

According to the Tracxn data, SVB has invested in close to 21 start-ups in the country. But the amount of investment could not be ascertained.

One of its significant investments is in SaaS-unicorn Icertis. The company had secured $150 million in funding, consisting of a revolving credit facility and convertible financing from SVB.

Icertis became a unicorn in 2021 and got this investment from SVB in October last year. An email asking the impact of the SVB crisis on the company did not elicit any response till the time of going to press.

Meanwhile, start-ups that had raised money from SVB include Bluestone, Carewale, and Loyalty Rewardz.

Paytm CEO Vijay Shekhar Sharma said in a Tweet that SVB was one of his first investors that helped Paytm grow from a telecom VAS company to what it is today. But he clarified that SVB had fully exited and was not a shareholder at present.



The data from Tracxn also shows SVB has not made much investment after 2011.

Among venture capitalist players, Accel Partners has a tie-up with SVB. The SVB page stated that the Accel India founders choose SVB to accelerate growth.

An email sent to Accel Partners India on whether it had asked its start-ups to pull out funds from SVB did not receive any response.

SVB invested in over 20 startups since 2001 but may have exited from several of these over a decade ago. More details could not be ascertained.
 

While it could not be ascertained if the SVB crash will impact Indian start-ups, especially those that have substantial operations in the US market, US-based venture capital funds, according to media reports, have asked founders to remove funds from the bank.

SVB is deeply embedded in the US start-up scene as the only publicly traded bank focused on Silicon Valley and tech start-ups. 

According to its website, it does business with nearly half of all US venture capital-backed start-ups, and 44 per cent of US venture-backed tech and health-care companies that went public last year.

Apart from banking operations, SVB also has a venture capitalist and private equity division.

It lists Pinterest Inc, Shopify Inc. and cybersecurity firm CrowdStrike Holdings Inc. among the bigger household names it has served.

According to a Bloomberg report, the crash in SVB has led many prominent venture capitalists like Peter Thiel’s Founder’s Fund, Coatue Management and Union Square Ventures to instruct portfolio businesses to limit exposure and pull out cash from the bank. 

Other venture capital firms have asked portfolio companies to at least shift some of their cash from the bank, while a number have indicated they will stand by SVB. This report has been updated to include the Paytm CEO's reaction