Silicon Valley Bank crises: The next two months will be crucial for many of these Indian businesses as they attempt to work out a short-term financing strategy.
Y Combinator-backed Indian firms have been struck hard by the closure of Silicon Valley Bank (SVB), with many now unable to cover basic operating costs. Several businesses are trying to work out a short-term financing strategy for the next two months while waiting for the US Federal Reserve to respond.
Impact on Indian startups
According to Tracxn statistics, SVB has invested in roughly 21 firms in India, albeit the precise value of such investments is unknown. Bluestone, Carwale, InMobi, and Loyalty Rewardz are just some of the other firms that have received funding from SVB. From what we can tell from Tracxn, SVB has not made any significant investments in Indian firms since 2011. Paytm, Paytm Mall, and One97 Communications are all on Tracxn's list of supported services.
Founder Vijay Shekhar Sharma claims that Silicon Valley Bank (SVB) has fully cashed out its $1.7 million investment in Paytm and made substantial profits. After years of ownership, Sharma has verified that SVB is no longer a part of Paytm.
At least 40 YC-backed Indian firms have between USD 250,000 and $1 million in deposits with SVB, and more than 20 of them have deposits above $1 million apiece, according to a YC WhatsApp survey cited by The Economic Times.
Companies like Razorpay, Meesho, and Zepto that are larger and supported by Y Combinator in India have no dealings with SVB. The failure of the bank, however, is having an effect on companies in their early and mid stages of development. Several of India's largest YC firms have been transferring money abroad over the previous two weeks out of fear of market disruption.
Based on Tracxn data, these are the exposed Indian companies:
| Company |
Total funding in USD |
| Divitas Networks |
4 million |
| Shaadi |
8 million |
| CarWale |
9 million |
| iCafe Manager |
10 million |
| GeodesicTechniques |
11 million |
| Sarva |
12 million |
| Asklaila |
12 million |
| Anantara Solutions |
13 million |
| Games2win Media |
13 million |
| Loylty Rewardz |
28 million |
| Genesis Colors |
74 million |
| iYogi |
85 million |
| TutorVista |
102 million |
| BlueStone |
111 million |
| Naaptol |
133 million |
| Bharat Financial Inclusion |
144 million |
| lnMobi |
265 million |
| Paytm Mall |
808 million |
| One97 Communications |
2787 million |
| Paytm |
4637 million |
Future
A special meeting of the Federal Reserve Board of Governors will be held behind closed doors on March 13, 2023, following accelerated procedures. Federal Reserve Banks' advance and concession rates were announced to be reviewed and established by the Board on March 12.
Also, READ: ‘Ab number aayega inka…’: Ashneer Grover's prediction after Silicon Valley Bank collapse
This week, Union Minister Rajeev Chandrasekhar plans to meet with Indian entrepreneurs to discuss the problem and learn how the government of Narendra Modi can best assist.
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