Chinese companies and founders rush to calm investors after Silicon Valley Bank’s collapse
The collapse of Silicon Valley Bank (SVB), which courted Chinese start-ups, has caused widespread concern in China, where a string of founders and companies rushed to appease investors by saying their exposure was insignificant or nonexistent.
SVB, which worked with nearly half of all venture-backed tech and healthcare companies in the United States before it was taken over by the government, has a Chinese joint venture, which was set up in 2012 and targeted the country’s tech elite.
The SPD Silicon Valley Bank, which was 50-50 owned by SVB and local partner Shanghai Pudong Development Bank, said Saturday that its operations were “sound.”
It’s unclear what will happen to SVB’s ownership of the joint venture.
SVB Financial Group, the parent company of SVB, also has two business consulting firms and one financial service firm in mainland China, according to the corporate database Tianyancha.
Concerns about the failure of SVB have spread around the world, as investors fretted about the broader risks to the global banking sector and any potential spillover effect.
Not significant exposure
In China, at least a dozen firms have issued statements since SVB collapsed trying to pacify investors or clients, saying that their exposure to the lender was limited. Most were biotech companies.
BeiGene, one of China’s largest cancer-focused drug companies, said Monday it had more than $175 million uninsured cash deposits at SVB, which represents approximately 3.9% of its cash, cash equivalents and short-term investments.
Other companies that publicly assured investors included Zai Lab, Andon Health, Sirnaomics, Everest Medicines, Broncus Medical, Jacobio Pharmaceuticals, Brii Biosciences, CStone Pharmaceuticals, Genor Biopharma and CANbridge Pharmaceuticals.
Mobile ad tech firm Mobvista and wealth management firm Noah Holdings said their cash holdings at SVB were “minimal” or “immaterial.”
Popular selfie app Meitu said it hadn’t held any bank accounts at SVB since 2020. It issued a statement “to avoid any potential public misunderstanding.”