Startups will have to scale back and preserve capital in the backdrop of the sudden collapse of the US-based Silicon Valley Bank (SVB), Singapore Monetary Authority chief fintech officer Sopnendu Mohanty said on Monday.
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SVB’s collapse has sent shockwaves globally as the lender is considered to be crucial for early-stage businesses as it had ties with nearly half of venture-backed companies in the US. Its abrupt failure marks one of the largest bank failures since the 2008 global financial crisis.
‘’It will not be easy. Existing founders will struggle even getting the existing capital. So they have to deal with this market crisis from a profitability perspective. So the startups will have to scale back, spend less. Do not burn the money irresponsibly. They have to preserve capital and find a way to survive the winter,” Mohanty said while speaking at India-Singapore Hackathon 2023.
Mohanty further added that the collapse of the lender would create a gap in the startup ecosystem and the entrepreneurs would need to find ways to “survive the winter”.
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On the recently announced integration of Unified Payments Interface (UPI) of India and PayNow of Singapore, Mohanty said the move is going to be the global template for multi-country connectivity.
‘’I think this will become a foundational infrastructure upgrade for the future of financial services,‘’ he added.
Speaking at the inaugural session, Union minister Dharmendra Pradhan said India is a major power in the digital world. The minister for education and skill development and entrepreneurship said that the government is working with Singapore on increasing cooperation in areas such as education and skill development.
