Latin American tech startups scramble after SVB collapse

• Tech startups in Latin America are struggling to find banking alternatives after the sudden crash of Silicon Valley Bank (SVB), one of the few banks that offered much-needed dollar accounts and catered to the specific needs of the sector.
• "This touched (almost all) venture-backed companies in Latin America," said Brian Requarth, the Mexico City-based co-founder of startup platform Latitud.
• Local startups now have few alternatives for a banking partner in the wake of SVB's collapse, Requarth said. Over the weekend, U.S. regulators announced an emergency plan allowing depositors of Santa Clara, California-based SVB to access their funds.
• In 2022, more than 1,300 startups in Latin America raked in an estimated $28.17 billion in funding, according to the Association for Private Capital Investment in Latin America.
• Vicente Garrido, the co-founder of Mexican rental property startup Roddo, told Reuters he still was not sure whether the company would make payroll this week.
• "We had all of our capital there, in the U.S.," Garrido said. "In Mexico, we held just a fifth of what we spend in a month."
• Startups in the region often relied on SVB as one of the few banks that offered them U.S. dollar accounts, a requirement from venture firms providing capital in greenbacks.
• Startups would open SVB accounts using what Requarth called a "Cayman sandwich," using holding companies in the Cayman Islands and limited liability companies (LLCs) in the U.S. state of Delaware to avoid a taxation double whammy if the firm was ever sold.

(Source: Reuters)