How the Silicon Valley Bank Collapse Tore Down Global Tech | – #Silicon #Valley #Bank #Collapse #Tore #Global #Tech
March 14 (Reuters) – Not long after California startups started pulling money out of troubled Silicon Valley Bank, entrepreneurs elsewhere around the world woke up to the news.
“About 90% of our cash was in SVB,” said Sam Franklin, a 28-year-old chief executive at London-based recruitment firm Otta, which specializes in tech talent. He gave up his weekend “life admin” to figure out how to pay his employees at the end of the month.
In Hong Kong, Florian Simmendinger, co-founder and chief executive of Hong Kong-based Soundbrenner, missed the start of the panic over SVB Financial Group ( SIVB.O ) in California last week, but he caught on quickly.
“I feel like what? are you kidding me I guess my bank?’ he said. “We were no longer able to access our account during normal business hours.”
Silicon Valley BankWhile the global implications of the collapse of ) are just beginning to emerge, one thing is clear: tech startups, no matter how far apart, are connected. Many depend on a medium-sized bank for their day-to-day operations.
Following the lead of their Californian counterparts Europe and startups in Asia last year USAThe 16th largest in the technology cachet and specialized financial services offer was involved in the bank.
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USAThe founders of the Careful
Quincy Lee, founder of Seattle-based electric charging startup Electra Era, withdrew millions from Silicon Valley Bank on Thursday afternoon as warning signs mounted. dollars tried to transfer.
The website was up and running, with heavy traffic. A customer service agent told her over the phone that there might be a delay because so many people were trying to withdraw. On Monday afternoon, he managed to get his money and the alternative bank was looking for
After a weekend of intense debate over the future of SVB USA regulators have introduced an emergency funding plan that gives the bank’s customers access to all their deposits.
In Britain, Chancellor of the Exchequer Jeremy Hunt said the government and the Bank of England had facilitated the private sale of SVB’s UK arm to HSBC ( HSBA.L ), which tax said it would protect deposits without the support of its payers.
Europe Union officials also assured consumers of the bank’s “very limited involvement” in the bloc. Christoph Stresing, managing director of the German Startup Association, expressed cautious optimism that local companies will take the easy way out.
However, Europe stocks bank caused concerns about its industry, and even startups that didn’t bank with SVB were confused.
“It’s hard to understate how connected SVB is to the startup ecosystem,” said Rachael Crook, founder and CEO of London-based healthcare startup Lifted. Over the weekend, he reassured investors and made sure that important service providers would not be left stranded after executives raised concerns that a key financial partner might have money tied up in SVB.
Working with SVB in USA Ukraine Aleksandr Volodarsky, CEO of startup lemon.io, told Reuters on Thursday that he had begun discussing the collapse with other entrepreneurs in the region.
“We started the money transfer on Friday morning and still nothing,” he said. “We were lucky because we just paid the developers and engineers two days ago.”
CHINESE STARTUPS THAT MOVE MONEY
SVB’s Shanghai-based joint venture SPD Silicon Valley Bank (SSVB) said it has a sound corporate structure and an independent balance sheet. SSVB is China’s first technology and innovation bank and the first Sino-US joint venture bank.
SVB has been the dominant foreign bank for early-stage companies in China, as it is one of the few banks that makes it easy for start-ups to open bank accounts for dollar financing, advisers and companies said.
But many Chinese startups and fund managers are working to get their money out of SVB’s US arm.
One lawyer at a China-based venture capital firm said almost all of its portfolio companies’ operating cash, as well as its own operating cash, was kept at SVB and that it spent the weekend strategizing on alternatives.
After a weekend rollercoaster, Otta CEO Franklin of his company SVB Great Britain The bank will continue to branch out and add accounts in more banks.
“The big learning curve for a lot of us in this industry has been, ‘If you’ve got a lot of cash, you’ve got to spread it around.'”
Reporting by Martin Coulter, Maggie Fick, Krystal Hu, Supantha Mukherjee, Hakan Ersen, Josh Horwitz, Josh Ye and Tom Sims; Edited by Peter Henderson and Richard Chang
Our standards: Thomson Reuters Trust Principles.
2023-03-14 01:48:40
Source – reuters
Translation“24 HOURS”