The recent collapse of the US-based Silicon Valley Bank(SVB) left many startups and investors in the lurch. The event also triggered panic in the Indian startup ecosystem where many companies had their funds deposited in the beleaguered bank. The SVB held an estimated $1 billion in deposits of hundreds of Indian startups at the time of the meltdown. As startups hurried to bring their funds from US accounts to Indian banks, some companies came to their rescue and facilitated the transfer. Fintech giant, Razorpay was among the few who took several measures and helped more than 80 startups move over Rs 60 crore to India in just 10 days.
What role did Razorpay play?
Soon after the SVB failure, Razorpay swung into action and began working with its banking partners to help ease the stress among startups. RazorpayX, the giant’s business banking platform set up a dedicated helpdesk for Indian startups to safely move their funds out of SVB. The Bengaluru-based payment gateway approached its customers that had an account in SVB and provided them support through partner banks. It helped such customers move their money into Indian current accounts via FDI route or inward remittance against pending invoices.
For those who were not a customer of RazorpayX, the company set up GIFT City accounts overnight with the help of its partner banks.
Many Indian startups hit by the SVB collapse were contemplating opening an account in domestic banks that had IFSC Banking Units in GIFT City. Of the $1 billion funds of Indian startups stuck in SVB, roughly $200 million was transferred to GIFT City. This appeared to be one of the convenient and effective ways for startups to transfer their funds.
Making sure that more and more startups avail of the benefits of the initiatives, Razorpay shared informative posts with customer support details on Twitter, WhatsApp groups, and other social media platforms to help Indian startup founders affected by the SVB shutdown.
A Razorpay Spokesperson said, ‘’Our teams worked relentlessly 24X7 during the 48 hours post the SVB collapse along with our banking partners to find solutions and ease the panic among founders. Thanks to our teams’ passion and agility, we are humbled to be able to help over 80 Indian startups safely move their money to India. And all this wouldn’t have been possible without our banking partners who were equally agile in solving for the money movement.”
One of the biggest learnings that startups can gather from this situation, is to learn more about the existence of Gift City account options and, how does it work.
When we were facilitating our efforts in moving the funds that startups had, we saw that there was a genuine awareness that had to be built around Gift City and its benefits.
Pawan Gupta, Cofounder and CEO, BETTERHALF PVT LTD said, “RazorpayX reached out to Betterhalf Pvt Ltd at the peak of SVB crises. Even though it was clear they were swamped with requests from other start-ups like us, the RazorpayX team provided us with exceptional service and prompt assistance via their partnership with RBL.
To ensure the safety and compliant movement of our funds, they went above and beyond to set up a GiftCity account for us, as it was the best solution at that point. It is a new product but the team was very patient in tackling all our queries whilst providing guidance throughout the account set-up process.”
The collapse of the SVB dealt a blow to many companies. While startups should be more aware about the Gift City accounts, intervention from the government and cooperation of the RBI can help avert such future crises.
Disclaimer: The above sponsored content is non-editorial and has been sourced from a third party. NDTV does not guarantee, vouch for or necessarily endorse any of the above content, nor is responsible for it in any manner whatsoever.
