Stunned by the sudden collapse of Silicon Valley Bank, the main go-to foreign bank for the majority of Chinese start-ups, entrepreneurs and venture funds are scrambling for alternatives despite U.S. regulators averting a banking crisis by guaranteeing all deposits of the troubled bank.
on Friday, putting to rest fears that startups would struggle to pay their employees this week.
CB International Bank, a U.S.-headquartered bank serving mainly Asian small- and medium-sized companies, said it has been contacted by many start-ups and U.S. dollar funds seeking to open accounts quickly so they can deposit funds they have withdrawn, or plan to withdraw, from SVB. "We are still searching for a bank which we could safely open an account with," said an executive at a Chinese venture capital fund with deposits at SVB who declined to be identified as she was not authorized speak to media.China is home to thousands of start-ups and venture capital investment is expected tothis year after funding in 2022 was battered by the country's zero-COVID policy, a share market slump and U.S.-China tension.
Going forward "everyone will need to set up two accounts - one for domestic capital and the other for foreign capital," said Stephen Chen, co-founder of Shanghai-based start-up Lead Digital.
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