The failure of Silicon Valley Bank has left many Chinese funds and tech start-ups in the lurch, as the collapsed institution served as a key funding bridge for groups operating between China and the US, reports the Financial Times. SVB’s abrupt takeover by US regulators on Friday has also cast doubt over the fate of its joint venture in China with Shanghai Pudong Development Bank, which maintains a separate balance sheet and has total assets of RMB 21 billion ($3 billion).
The Silicon Valley lender played a big role in China’s dollar-based ecosystem for funding fledgling companies, industry insiders said, with funds and start-ups often holding money at the bank before bringing it onshore to mainland China.
The run on SVB happened so quickly—with $42 billion leaving the bank’s coffers on Thursday in the US—that by the time decision makers in China were waking up on Friday morning local time, attempts to rescue their money were already in peril.