Silicon Valley Bank

Temasek Holdings Owns 100% Stake In Silicon Valley Bank’s Subsidiary

Silicon Valley Bank was shut down by US regulators on Friday, March 10. This happened after customers withdrew $42 billion – a quarter of its total deposits – in one day. This led to a liquidity crisis for the bank. With about $209 billion in assets, SVB has become the second-largest bank failure in US history, after the 2008 collapse of Washington Mutual.

While the full impact of SVB’s shutdown is not yet clear, investors who held stakes in SVB or its subsidiaries are already experiencing significant losses.

Temasek says they have no direct exposure to the collapse of SVB. However, they actually have indirect exposure. What a way with words.

In 2015, they actually acquired a 100% stake in Mumbai-based venture lender SVB India Finance. SVB India Finance, is a wholly-owned subsidiary of Silicon Valley Bank Financial Group. The transaction was made at approximately $46.4 million. In that same year, Temasek renamed the subsidiary to InnoVen Capital India and introduced their operations in Singapore.

Temasek needs to exercise more caution and prudence when investing in companies, especially those in the technology sector that can be volatile and subject to rapid changes. Previously it was the collapse of FTX. Now it is the Silicon Valley Bank.

These events highlight the potential risks associated with investing in financial institutions and technology companies. While it’s impossible to predict every potential market event, it’s crucial for Temasek and other investment firms to conduct thorough due diligence and risk assessments before investing in any company.

Editor’s note: To those who say that Innoven no longer has anything to do with SVB – Innoven has similar investments in Indian and Chinese start-ups that led to SVB’s collapse. They follow very similar business models and pick start-ups with similar profiles. We will see in due time how these investments will end up, but either way this is an alarm bell to the lack of proper due diligence from such a decision-making process. This is still a form of indirect exposure.