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SHANGHAI/HONG KONG -Stunned by the sudden collapse of Silicon Valley Bank, the main go-to foreign bank for the majority of Chinese startups, entrepreneurs and venture funds are scrambling for alternatives despite U.S. regulators averting a banking crisis by guaranteeing all deposits of the troubled bank.
Chinese startups and fund managers said they are still looking to move their money out of SVB once they can. Some of them are turning to bigger U.S. banks, while a few Chinese lenders such as China Merchants Bank and the Industrial & Commercial Bank of China are also rushing to fill the gap.
Such banks have offered account services similar to those of SVB, but found it hard to crack the U.S. bank’s dominance among early-stage start-ups in China, where SVB has operated for more than two decades and has a local joint venture.
As SVB was one of the few banks that made it easy for startups to open bank accounts for dollar financing, it was the dominant foreign bank of choice for young companies in China, advisors and companies said.
“China Merchants Bank told us they can set up an offshore account for us within a week,” said one startup founder who gave his surname as Hong, describing how he had been offered a number of proposals by banks, including Zheshang Bank , to solve his issues with SVB.
