Union minister to meet Indian startups to assess Silicon Valley Bank collapse impact

The FDIC ordered the closure of Silicon Valley Bank and immediately took position of all deposits at the bank Friday.

Union Minister Rajeev Chandrasekhar will meet Indian startups soon to understand the impact of the Silicon Valley Bank (SVB) collapse.

According to various industry players and experts, most Indian software-as-a-services startups with a presence in the US and firms linked to incubator Y Combinator are among entities that will feel the heat of the Silicon Valley Bank collapse but the impact is likely to be short-term.

"The SVB_Financial closure is certainly disrupting startups across the world. Startups are an imp part of NewIndia Economy. I will meet wth Indian Startups this week to understand impact on thm n how @narendramodi govt can help durng this crisis," Chandrasekhar tweeted on Sunday.

SVB was deeply entrenched in the tech startup ecosystem and the default bank for many high-flying startups; its abrupt fall marked one of the largest bank failures since the 2008 global financial crisis.

Industry watchers expect a quick takeover of the bank as it has enough assets that can be liquidated to return money to the clients.

Y Combinator-backed startups get their payments in the accounts they hold in SVB but many of Indian firms linked to incubators like Meesho, Razorpay and Cashfree Payments have said that they have no exposure to the crisis.

Y Combinator-incubated Indian startup Snazzy's co-founder and CEO Ayush Pateria said that most Indian startups, incubated at Y Combinator, who are exposed to SVB, are in their early stage.

Fintech firm Recur Club founder and CEO Eklavya Gupta said that there are some large-size SaaS companies on the west coast with operations in the US and India, who have had significant exposure to SVB.

The FDIC ordered the closure of Silicon Valley Bank and immediately took position of all deposits at the bank Friday.

The bank had USD 209 billion in assets and USD 175.4 billion in deposits as the time of failure, the FDIC said in a statement. It was unclear how much of deposits was above the USD 250,000 insurance limit at the moment.