SVB collapse overshadows SXSW agenda

The South By Southwest festival (SXSW) for interactive technology, startups and the creative arts usually takes the stage in Austin, Texas, to a backdrop of excitement with lavish spending on design. This year’s opening, however, came against a backdrop of a run on Silicon Valley Bank – an institution servicing many of the very start-ups used to grabbing headlines at SXSW. The breaking news blew much of the prepared conference agenda away as the topic became the number one issue of discussion both at official meetings and in the general chat on the streets. There were reports of some delegates’ credit cards suddenly stopping working and of panellists distracted from the topic under discussion as they became more absorbed in checking their smartphones for updates on the SVB situation, with some admitting to frantically trying to withdraw their funds. Some participants were concerned that they would no longer be able to pay suppliers and reign Ventures, an early-stage venture capital firm, ws reported to have cancelled its planned events at the conference. Nevertheless, 300,000 participants were still expected to attend the festival, which runs until 19 March. SXSW-related events dominate the city’s downtown and surrounding area, with one NBC report going with the headline: “Panic and partying reign at SXSW amid Silicon Valley Bank collapse’. SVB was even reported to have hosted a private dinner in downtown Austin, on the eve of its collapse. Although the Biden administration stepped in to guarantee SVB funds preventing many startups collapsing, it was surely a stressful start to the festival for the usually laid back crowd of tech entrepreneurs that dominate SXSW. As of Wednesday, 15 March, banking shares reached a three-month low and were continuing to fall on stock markets. “Investors remain nervous about what might be lurking in the shadows,” Russ Mould, investment director at AJ Bell, told the BBC. “It’s no wonder that investor sentiment remains cautious towards the big banks given that credit agency Moody’s downgraded its outlook on the US banking system to ‘negative’.”