Startups find routes to ensure capital, salaries remain intact

DEPOSITS STUCK IN SILICON VALLEY BANK

- TUSHAR GOENKA

Indian startups that have an exposure, or are stuck with deposits in the troubled Silicon Valley Bank (SVB) are tapping alternate options to fund their immediate working capital requirements, especially payroll commitments, industry players said. Revenue financing platforms like Recur said it was seeing a strong demand for its services over the past two days.

While some Indian startups were creating a cash buffer by raising capital that is readily available right now, the others were doing so to meet their expenses that become due over the coming days. However, new-age companies in the United States, especially those backed by Y Combinator, a startup accelerator, are likely to come under more pressure, as opposed to their Indian peers, as their payments become due as early as Monday — primarily because most companies in the US pay their employees on a semi-monthly basis. Within the Y Combinator community, one-third of startups that have an exposure to SVB used SVB as their sole bank account, according to a petition that Y Combinator was running on its website.