Business software firm Freshworks said on Monday its exposure to Silicon Valley Bank (SVB), the failed American lender, is minimal and it didn’t see "any disruption".
“We use SVB and several other banks for normal operations (receiving customer payments, processing payroll and payments to our vendors). Our exposure to the current SVB situation is minimal relative to our overall balance sheet,” said Chennai-based Freshworks in a statement. “The vast majority of our cash and marketable securities today is not held at SVB.”
Freshworks worked with Silicon Valley Bank in its early phase as a start-up, but brought in larger, diversified banks such as Morgan Stanley, JP Morgan and UBS as it grew.
The company said it is working with its customers and vendors who use its SVB account to migrate to alternate banks. “We do not foresee any disruption to our employees or customers,” the firm said.
More than 50,000 companies use Freshworks’ SaaS (software-as-a-service) products for customers and employees. Its customers include Bridgeston, Synergy, and Honda, as per its website.
SVB, which is a subsidiary of Santa Clara-based SVB Financial Group, has relationships with over 50 per cent of all venture-backed companies in the US and several venture capital (VC) firms.
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SVB Financial Group said on March 8 it had sold about $21 billion worth of securities from its portfolio, due to which it would suffer an after-tax loss of $1.8 billion in the first quarter. This triggered a large-scale sell off of its shares, inciting panic.
Several Indian start-ups backed by VCs, such as Accel, Sequoia India, Y Combinator, and SoftBank, banked with SVB, said people familiar with the matter. Industry sources said some 1,000 Indian start-ups may have exposure to SVB.