Tech start-ups in Singapore may be in for a tougher fund-raising environment, with investors likely to turn cautious following the collapse of Silicon Valley Bank (SVB) and Signature Bank in the United States, analysts and venture capital firms told CNA.
US regulators pulled the plug on US tech start-up-focused SVB last Friday, making it the largest bank to fail since 2008 when the financial crisis hit. Two days later, regulators also closed Signature Bank, which was widely used by cryptocurrency firms.
Some fears were allayed when the US government said depositors of the failed US banks will have access to their funds, alongside other actions to provide banks with access to emergency funding and stem any broader financial fallout.
But until those deposits are properly disbursed, start-ups in Singapore that have operations or exposure to the US will likely face “operational cash flow issues in the short-term”, said Christopher Quek, managing partner of TRIVE Venture Capital.
The funding of start-ups that have US-based venture capitalists or investors may be stalled or delayed. In particular, crypto start-ups may also experience short-term disruptions as other companies in the sector have lost their banking facilities due to the shutdown of Signature Bank, he said.
The Monetary Authority of Singapore (MAS) said on Monday that it is “in close touch” with Enterprise Singapore to assess any potential impact on local start-ups, including those with operations in the US.
Initial feedback indicates that the impact is “limited”, the central bank said, adding that it will continue to monitor the situation closely for any signs of stress.
Source: CNA
