Silicon Valley Bank (SVB) closure has shocked India’s investment and startup ecosystem, says Prateek Toshniwal, Co-founder of IVY Growth Associates and Partner at MI Capitals.
Speaking on the development, Toshniwal said, “With SVB having been a significant player in providing funding and financial services to startups and investors in India, its closure is expected to lead to a significant reduction in the availability of funding and financial services for Indian startups, potentially hindering their ability to develop and prosper.”
SVB has been operating in India since 2004 and has around 250 clients in the country, including top startups such as Flipkart, Ola, and InMobi. It was a key player in providing funding and financial services to Indian startups and investors.
“The closure of SVB is expected to lead to a significant reduction in the availability of funding and financial services for Indian startups, which may hinder their ability to develop and prosper. This is likely to have broader ramifications for foreign investment in India, given the scale of SVB’s operations in the country and the accessibility of substitute funding sources and financial services for Indian startups and investors,” he said.
“The impact of SVB’s closure is already being felt, with some Indian enterprises transferring their deposits out of SVB while others closely monitor the situation. Venture capitalists and startups with US-based operations may also be affected,” Toshniwal added.
Further continuing with the statement, Toshniwal said, “India’s economic market abides by strict regulations and is expected to cope with the SVB closure scenario successfully. However, the impact on Indian startups and investors cannot be overlooked, as SVB has been a genuine booster of the startup ecosystem in India.”