Present imperfect, future tense for Indian start-ups

Though many of them expect limited near-term impact, lack of SVB-like support system may pinch them later

- ARYAMAN GUPTA & PEERZADA ABRAR

Indian startups breathed a sigh of relief after the UK government facilitated the acquisition of the now-defunct Silicon Valley Bank´s (SVB´s) British arm by HSBC.

In a bid to allay fears, the US Federal Deposit Insurance Corporation (FIDC) announced on Sunday that it had transferred all deposits of startup-focused SVB to a newly created bridge bank and all depositors would have access to their money beginning Monday morning. President Joe Biden also sought to reassure jittery depositors that they can have confidence that the US banking system is “safe”.

“The government is bailing out depositors, and that ensures continued faith in the US banking system for the startup and VC ecosystem. We were also part of a petition from Y Combinator which requested the government to intervene. For me, personally, the support received from the entire ecosystem, existing investors, and other fellow founders was pivotal; it also showed the power of the community we belong to,” said Sourabh Deorah, cofounder and CEO, Advantage Club.

Nitish Mittersain, founder and CEO of Nazara Technologies, is of the view that the situation is challenging for younger startups that had SVB as their only banking partner. “Depending on when funds are made available, cashflow issues may arise. The biggest concern right now among startups is taking care of immediate short-term liquidity requirements,” he said.