Bankruptcy of the SVB bank: what impacts on African tech?

The problems of the SVB tech bank have repercussions for African startups. (Illustrative image) AP - Michael Probst

Text by: RFI Follow

2 min

The setbacks of the SVB, American bank of Silicon Valley, support of the ecosystem of startups, are also scrutinized on the African continent. If the data is not precise, it is clear that the SVB has a footprint on the continent: through the deposits of some startups, or through startup investment funds on the African continent. What are the consequences for African tech?

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Very quickly, the alert was launched. Tanzanian Benjamen Fernandes, head of Nala Money on Twitter, recounts his "nightmare". "We had the majority of our money in the SVB. I transferred everything to another bank. An hour later, it was impossible to connect to SVB.

If there is no precise data: startups from countries such as Egypt, Nigeria or South Africa seem to be more concerned. In these countries, the startup ecosystem is more developed, the use of the dollar more widespread. The investment of their funds in the United States also guarantees security for them against fluctuations in their local currencies.

Other players are concerned about possible repercussions on the financing of startups in French-speaking Africa. And this while the latter were just beginning to position themselves against the English-speaking giants of the continent. Papa Amadou Sarr is the head of the General Delegation for Rapid Entrepreneurship in Senegal. This tech specialist fears that an amalgam will quickly be made between the volatility of the financing of the first fundraising of startups, and the risk of bankruptcy of specialized banks. This would discourage investment.

Ugandan Ham Serunjogi co-founder of Chipper Cash goes in this direction. In a statement, he defended the SVB, stressing the importance of this bank in the ecosystem. Now valued at $ 2 billion, Chipper Cash has however struggled to make its first fundraising. Only the SVB trusted the startup and thus allowed its launch, he explains.

There is no direct disaster, various experts in the sector agree. However, all eyes are now on the Fed, which has committed to lending the funds. But how soon will they be released? Because if startups can operate in the short term, they may have liquidity problems if the money remains blocked for too long.

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