Silicon Valley Bank collapse is impacting many Indian startups

The sudden collapse of Silicon Valley Bank, which served as lifeblood for startups, is also impacting firms 8,000 miles away.

Dozens of young Indian startups backed by the likes of YC, Accel, Sequoia India, Lightspeed, SoftBank and Bessemer Venture Partners banked with Silicon Valley Bank, sometimes as their only banking partner, and couldn’t take out the money on time, multiple people familiar with the situation said.

VCs are cautious about divulging the names of the impacted startups out of fear that it would impact the young firms’ prospects of raising capital in the future. Regulators stepped in Friday to shut down Silicon Valley Bank, the 16th largest in the U.S. and the bank for most startups.

Some Indian firms couldn’t timely move their funds from Silicon Valley Bank because they didn’t have another US banking account readily available, many venture capitalists recounted.

Many Indian startups are incorporated in Delaware to make it easier for them to raise capital from U.S. venture firms such as Y Combinator. Some SaaS firms are…