And yes, Israel’s high-tech industry can rely on the democratically elected government of Israel, although a few have incited with totally incompetent statements against the government and taken pretentious moves by withdrawing capital from Israel. They will now think twice about carelessly moving their capital.
What is the background? Silicon Valley’s leading start-up bank – the ‘Silicon Valley Bank’ (SVB) – has been forcibly closed by the Fed. There is a risk of bankruptcy. According to industry insiders, around 100 Israeli startups are associated with SVN.
TechCrunch described the problem: “Deposit insurance, per the FDIC’s definition, means that deposits are insured up to at least $250,000 per depositor, per FDIC-insured bank, per ownership category. Could depositors receive more than this? It isn’t clear.” So, a lot of money will be burned, especially from Israeli companies.“
And the CEO of SVB, Greg Becker, begged his customer to stay calm, because they can cause real troubles which will end in a disaster for all. Wise words, which are also true in the case of Israel. However, Israel is far away to be insolvent, but the incitements by the Left can easily become a self-fulfilling prophecy.
So, read and mark the words of Beck: “If everybody is telling each other that SVB (…) so stay calm. That’s my ask. We’ve been there for 40 years, supporting you, supporting the portfolio companies, supporting venture capitalists.”
Customers of SVB withdrew a staggering $42 billion of deposits by the end of Thursday, according to a California regulatory filing. So, it is the second largest bank collapse in the USA history. Even worse, as GLOBES reported that: “The four biggest banks in the US had over $50 billion wiped off their value and the region bank index (KRE) fell 8% on its worst day since June 2020.“
Speculation
Some pundits speculate that the collapse hardly came as a surprise out of the blue haze. There was therefore a great need for capital in the Silicon Valley banking scene, meaning that the more companies were transferring to the accounts of the SVB and other start-up banks, the better it will be – and to avoid a collapse.
Handsome the crisis in Israel fuelled and initiated by the Left with very good connections to the echelon of Silicon Valley which sides with left politics, as it is a known open secret. Handsome to initiate a scaremongering among Israeli companies that they will in consequence transfer their billions (and maybe their headquarters too) to the US to SVB and other Silicon Valley banks. And weaken the Israeli government too. Two birds with one stone. And there is a tough competition of the nations worldwide. There are no friends. Nations have interests.
The Israeli unicorn and high-tech company ‘Papaya’ seeked to lead this movement of disinvestment of the Israeli economy and was the first well-known company to emerge. It comes as little surprise that Papaya is now poised to bail out funds at risk to J.P.Morgan. JP Morgen, who never tired of speaking badly of Israel. Coincidents can happen.
GLOBES wrote: “Guez (note by VonNaftali: Papaya Global CEO Einat Guez) promised that within two hours from receiving a request and all the information, Papaya Global can help transfer funds to an account at J.P. Morgan and execute payments to suppliers around the world based on its platform.” Like said, speculation.
Back to the facts that are there: Israel is saving its start-ups
Netanyahu
The Prime Minister said everything, nothing to be added. The Israeli high-tech branch can trust Bibi: “I am closely following the collapse of the American investment bank SVB, which is creating a deep crisis in the high-tech world. I held talks from Rome with high-tech officials in Israel, and upon my return to Israel I will discuss with the Ministers of Finance and Economy and the Governor of the Bank of Israel the extent of the crisis. If necessary, out of responsibility for companies and high-tech workers in Israel, we will take steps that will help Israeli companies, whose operations are centered in Israel, to overcome the liquidity crisis that has arisen for them. Israel’s economy is strong and stable, and this is again reflected in this crisis as well.”
As said, nothing to add. Israel under Prime Minister Netanyahu will save the Israeli High-Tech companies.