"Silicon Valley Bank’s closure will affect African startups", 11 March 2023

...The closure of SVB has triggered panic on the African continent, and that fear is not without reason. Y-Combinator’s president, Garry Tan, said on Twitter, “30% of YC companies exposed through SVB can’t make payroll in the next 30 days”. Y-Combinator has over 80 African startups in its portfolio. One of its founders tweeted yesterday, “All the startup founders groups I’m in are in full-on panic mode. Everyone is moving money around. Nobody knows which banks are safe.”

Several African startups had funds in SVB as the bank was a lender for startups and asked that startups have deposits in the bank as collateral. The bank offered loans against shares for founders and cashflow loans. Also, before Mercury Bank—one of Silicon Valley Bank competitors—was created in 2019, SVB was the preferred bank for startups.

According to SVB’s website, Chipper Cash, one of Africa’s most valuable startups, was one of its customers. The startup has recently been in the news for conducting another round of layoffs after laying off 12.5% of its employees last year. Employees at another fintech startup that spoke to TechCabal on the condition of anonymity said that their company had $1.5 million in SVB and are confused about how the company would move forward...