[ad_1]
The panic sparked by the collapse of Silicon Valley Bank is spreading to China, the world’s second-largest venture capital market. Across social media platforms, investors and startups are rushing to share news articles on the fiasco and thoughts on how to prevent such a catastrophic moment. For some companies, however, the impact is tangible.
When China was still new to venture capital in the late 1990s, SVB was among the first financial institutions to start serving the country’s startups, while traditional, risk-averse banks avoided them. Over time, the bank has become a popular option for China-based startups fundraising in USD as well as some China-focused USD venture capital firms.
In the U.S., VCs have been urging their portfolio companies to withdraw money from SVB as soon as the bank announced that it intended to sell shares in pursuit of more capital. Investors are advising the same to Chinese startups exposed to the bank, according to two founders TechCrunch talked to.
According to its website, SVB first began operating in China in 1999. In 2012, it formed a joint venture with Shanghai Pudong Development Bank, the first Sino-U.S. joint venture bank to obtain a license since 1997. The JV has since carved out a list of services, including onshore banking financial products and services in China, including liquidity solutions, trade financing, local and foreign currency deposits, wealth management, and foreign exchange settlement and sales services.
Bloomberg reported earlier that the JV is urging its clients to stay calm, saying it “isn’t affected by the turmoil surrounding the U.S. lender.”
For a more detailed account of what triggered SVB’s fall, read my colleague Alex Wilhelm’s explainer.
This is a developing story…
[ad_2]
techcrunch.com
