Nazara Tech said that Kiddopia and Mediawrkz have cumulatively transferred about INR 60 Cr to bank accounts outside of Silicon Valley Bank
On March 12, Nazara said that its step-down subsidiaries cumulatively held about INR 64 Cr in the US-based bank
The collapse of Silicon Valley Bank last week spread panic across startup ecosystems, including in India, as it primarily worked with tech companies backed by venture capitalists
Gaming major Nazara Technologies on Wednesday (March 15) said that its step-down subsidiaries Kiddopia and Mediawrkz have received unrestricted access to their entire cumulative cash balance of $7.75 Mn (about INR 64 Cr) held with Silicon Valley Bank (SVB), which collapsed last week.
From the total amount, a sum of $7.25 Mn (INR 60 Cr approx) has been transferred to bank accounts outside of SVB and the balance amount of $0.5 Mn (about INR 4 Cr) remains in the SVB accounts for unrestricted operational use, Nazara said in an exchange filing.
The development comes days after Nazara informed the exchanges about the amount of funds of its subsidiaries held at SVB. The gaming startup then said that both the subsidiaries were well-capitalised and, therefore, the SVB event would have no impact on their day-to-day operations, business performance, and growth plans.
Shares of Nazara rose following the company’s latest announcement today, ending the session 1.2% higher at INR 505 on the BSE.
The US-based commercial bank’s crash last week and its eventual shutdown on March 12 brought the startup ecosystem across the world under pressure as the bank primarily worked with tech companies backed by venture capitalists. The developments at the bank spread panic in the Indian startup ecosystem as well.
The shutdown of SVB is the largest bank failure since the 2008 financial crisis and the collapse of Washington Mutual Bank. SVB held total assets of $209 Bn and deposits of about $175.4 Bn, as of December 31, 2022. Investors like Y Combinator and General Atlantic worked with SVB.
Following the bank collapse, Y Combinator president and CEO Garry Tan said that 30% of its portfolio startups were exposed to the bank, which might delay salaries of thousands of startup employees across the world.
However, the US government intervened in the matter later and assured depositors of access to their money.
The Federal Deposit Insurance Corporation (FDIC), which was appointed as the receiver by the California Department of Financial Protection and Innovation (DFPI), and the Department of Treasury, in a joint statement, said that the depositors will have access to all their money starting March 13.
The announcement came as a major relief to the Indian startup ecosystem that has also been assured by the country’s government of all possible support.
Union Minister of State for Electronics and IT Rajeev Chandrasekhar interacted with hundreds of startups and VCs that were impacted by the SVB collapse and assured that the Centre was “laser-focused on making sure that every startup is able to navigate this storm”.
Kiddopia, a gamified early-learning platform, is a 100% subsidiary of Paper Boat Apps, with Nazara owning 51.5% stake. Mediawrkz is a 100% subsidiary of ad tech platform Datawrkz Business Solutions, with Nazara holding 33% in it.
Nazara reported a 31% year-on-year rise in its consolidated net profit to INR 22.4 Cr in Q3 FY23, while its operating revenue surged nearly 70% to INR 314.8 Cr during the quarter.