SVB collapse: Chinese tech start-ups await their turn to recover funds after FDIC guarantees deposits

AI-based HR tech company MoSeeker said its account was ‘frozen twice’ amid attempts to withdraw funds, but Andon Health said all its money was available

The US guaranteed on Sunday to make depositors whole after Silicon Valley Bank became insolvent when customers rushed to withdraw funds on Friday

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People queue up outside the headquarters of Silicon Valley Bank in Santa Clara, California on March 13. Photo: Xinhua

Tracy Quin ShanghaiandIris Dengin Shenzhen

Published: 9:00pm, 14 Mar 2023Updated: 11:10pm, 14 Mar 2023

Chinese entrepreneurs are in the process of withdrawing assets from Silicon Valley Bank (SVB) after a chaotic weekend that ended with the insolvent institution getting a guarantee from US regulators that depositors would be made whole.

Wang Xiangdao, founder of AI-based HR tech company MoSeeker, said the company has some assets in SVB, but not enough to “affect operations”.

“I’m still unable to withdraw the money,” he told the South China Morning Post on Tuesday. “My account was frozen twice for some unknown reason and I can [only] try again tomorrow morning.”

Investors in the Shanghai-based company, founded in 2014, include Recruit Holdings, Infinity Venture Partners and SPD Silicon Valley Bank, a joint venture between SVB and Shanghai Pudong Development Bank. The joint venture said on Saturday that, as a separate entity registered in China, its balance sheet is independent of SVB’s.

Wang said he is still optimistic about the situation but prefers to “choose big banks” in the future. “Anyway, it has already happened,” he added.

Some companies revealed that access to their accounts at SVB had already resumed. Andon Health said in a filing to the Shenzhen Stock Exchange that its deposits in SVB were fully available on Tuesday, with no losses suffered. The company revealed in a previous statement that its SVB deposits accounted for 5 per cent of its total cash and financial assets.

Since the US Federal Deposit Insurance Corporation (FDIC) guaranteed on Sunday to back all deposits after a run on SVB, customers around the world have been lining up to withdraw funds.