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Nearly two dozen YC-backed Indian startups have more than $1 million. More than four dozen more than $250,000 were tied to the lender, he said, stuck in Silicon Valley bank accounts. Results of a discussion and survey among startups featured in TechCrunch; Showing how The sudden collapse of a California-headquartered bankserved as Lifeblood for beginnersIt is also affecting organizations 8,000 miles away.
Dozens of Indian startups backed by the likes of YC, Accel, Sequoia India, Lightspeed, SoftBank and Bessemer Venture Partners banked with Silicon Valley Bank, sometimes as their sole banking partner, and were unable to disburse the funds on time Thursday. Several people familiar with the situation said.
VCs are wary of disclosing the names of affected startups, fearing it could affect young firms’ future capital-raising prospects. Regulators moved in on Friday to close the Silicon Valley bank, the 16th largest in the US and the bank for most startups.
Some Indian companies could not move their money out of Silicon Valley Bank in time because they did not have another US bank account readily available, several venture capitalists said.
Many Indian startups have settled in Delaware to make it easier to raise capital from American venture firms like Y Combinator. Some SaaS companies are registered in the US because they want to serve international markets and be seen as a US-firm even when operating from India.
Silicon Valley Bank was the preferred choice of many firms from India to the US, another person familiar with the matter said, noting that many events in India were sponsored by SVB as the lender’s executive. He was also pushed to increase ties with Indian companies.
Almost all Indian SaaS startups with a large presence in the US have banked with Silicon Valley Bank, said one of the investment partners. More than a dozen Indian SaaS unicorns and many other “soonicorns” are headquartered in the US.
Most of these young firms did not distribute their funds to multiple banks because in the early days of the firm, operators avoided incurring administrative costs. A US-based investor, who asked not to be named, said he knows for sure that many Indian companies have around $4-10 million standing in their SVB accounts.
Indian SaaS startups and otherwise YC-backed companies that set up their companies in the US and raise their offspring there often have SVB as their default bank Ashish Dev, head of Mirae Asset India. He tweeted.. “Certainty is killing them. While the developments are diverse, it is relatively safe.
Y Combinator president Gary Tan said more than 1,000 YC-backed startups were affected by the Silicon Valley bank failure. “30% of YC companies exposed through SVB will not be able to make payroll within the next 30 days,” he tweeted.
The story gets better as we learn more.
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