SVB bankruptcy is causing panic in China’s startup industry

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The panic caused by the failure of Silicon Valley Bank has spread to China, the world’s second largest venture capital market. Across social media platforms, investors and startups are scrambling to share news stories about the debacle and thoughts on how to prevent such devastating moments. But for some companies, the impact is tangible.

In the late 1990s, when China was still new to venture capital, SVB was one of the first financial institutions to start serving the country’s start-ups. Over time, the bank has become a popular option for US dollar-funded China-based startups and China-focused US dollar venture capital firms.

In the US, VCs have been urging investee companies to withdraw money from SVB as soon as banks have announced they intend to sell shares in search of more capital. According to two of his founders TechCrunch spoke to, investors are encouraging banking-related Chinese startups to do the same.

According to its website, SVB first started operations in China in 1999. In 2012, we established a joint venture with Shanghai Pudong Development Bank. A list of services including China’s onshore banking financial products and services, including liquidity solutions, trade finance, local and foreign currency deposits, wealth management, foreign exchange settlement and sales services.

Bloomberg previously reported that the JV was “not affected by the turmoil surrounding US lenders,” urging clients to calm down.

For a more detailed explanation of what triggered the collapse of SVB, read my colleague Alex Wilhelm’s explanation.

This is a developing story…