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Southeast Asia VC firms may see bigger impact from SVB decline than startups

TechTechnologySoutheast Asia VC firms may see bigger impact from SVB decline than startups
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SINGAPORE — Venture capital firms in Southeast Asia may see a bigger impact from the collapse of Silicon Valley Bank than startups as finding a replacement for the US-based bank in the region will be challenging.

“I think from a VC firm perspective, you will see a big impact here,” David Goude, managing partner at Jungle Ventures, told CNBC.Squawk Box Asia,

“It’s really because the local banks here are not providing the same products and services that SVB provides,” Goude said Tuesday. SVB was the primary bank to Jungle Ventures.

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While SVB served tech startups and venture capital firms mostly based in or having a presence in the US, some VCs based in Southeast Asia – such as Jungle Ventures and Golden Gate Ventures – were also clients of SVB.

Bank provides VC firms and startups with exposure to US capital markets as well as networking opportunities in the US

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SVB has built and offered a very strong product for VC firms, Goode said, adding that Jungle Ventures will now probably “have to look for a Big Four player in the US to be our partner.”

In terms of replacing some of the features that SVBs provide in the US, it’s “going to be tough,” Vinny Lauria, managing partner at Golden Gate Ventures, told CNBC.Street Signs Asia” on Tuesday.

“We were a customer of SVB so we understand the value addition very well,” Lauria said.

Lauria qualified that SVB held less than 1% of Golden Gate Ventures’ entire portfolio. For those companies backed by Golden Gate that banked with SVB, they did not take full banking services with US Bank, he said.

SVB crisis: VC firm says Southeast Asia now looks like a 'golden child' for US investors

Goude said that in Jungle Ventures’ portfolio of over 70 startups, only two companies had exposure to SVB.

“It was really because [these two companies] had operations in the US,” he said.

Goude said while two companies had exposure in SVBs, only one had material exposure.

For startups in Southeast Asia, VC firms say they Transition from Silicon Valley Bank collapse unlikely,

“The reality is that here in Southeast Asia, a lot of startups were actually buffered. Most didn’t bank with a Silicon Valley bank,” said Lauria of Golden Gate Ventures.

“So the reality is that Southeast Asia is already very different from what was happening in Silicon Valley,” he said.

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