Nazara Technologies, a diversified gaming and sports media platform, on Sunday said two of its step-down subsidiaries hold cash balances of around Rs 64 crore at the Silicon Valley Bank. On Friday, the dramatic collapse of the Silicon Valley Bank - the default bank for many high-flying startups and described as a linchpin of tech investing - roiled global markets, as it marked the largest bank failures since the 2008 global financial crisis.
Nazara Technologies, in a regulatory filing, said both subsidiaries - Kiddopia Inc and Mediawrkz - continue to be well capitalised and are generating positive cash flows along with profitability. Hence, Nazara Technologies said, it expects no impact on its day-to-day operations, business performance and growth plans due to the SVB event.
It further asserted that Nazara Group (Nazara Technologies Limited and its subsidiaries) continues to maintain healthy reserves of cash and cash equivalents in excess of Rs 600 crore excluding the SVB-impacted funds. The situation with SVB remains fluid, the company said adding it will keep all the stakeholders and public at large updated on further developments.
"We wish to inform you that two of Nazara Technologies Limited's (Nazara) step-down subsidiaries Kiddopia Inc and Mediawrkz Inc hold cash balances at Silicon Valley Bank (SVB), which is currently under the receivership of the Federal Deposit Insurance Corporation (FDIC). The balances held at SVB by Kiddopia Inc. and Mediawrkz Inc cumulatively account for USD 7.75 million (Rs 64 crore)," Nazara Technologies said in the regulatory filing.
While Kiddopia Inc is a 100 per cent subsidiary of Paper Boat Apps Private Limited (owned 51.5 per cent by Nazara), Mediawrkz Inc is a 100 per cent subsidiary of Datawrkz Business Solutions Private Limited (owned 33 per cent by Nazara). FDIC has stated that it would issue an advance dividend to depositors within the next week with future payments coming as asset sales occurred.
"Regardless of the ultimate outcome and its timing, both subsidiaries continue to be well capitalised and are generating positive cash flows along with profitability. Therefore, we expect no impact on their day-to-day operations, business performance and growth plans due to the SVB event," the company said in a BSE filing.
Nazara is an India-based, diversified gaming and sports media platform with a presence in India and across emerging and developed global markets such as Africa and North America, and has offerings across interactive gaming, eSports, ad-tech and gamified early learning ecosystems.
Federal Deposit Insurance Corporation on Friday seized the assets of Silicon Valley Bank after clients - many of them venture-capital firms and VC-backed companies that the bank had cultivated over time - began pulling out their deposits, creating a classic run on the bank.
Minister of State for Electronics and IT Rajeev Chandrasekhar will meet representatives of start-ups this week to assess the impact of their exposure to Silicon Valley Bank which was deeply involved in the tech startup ecosystem. According to various industry players and experts, most Indian software-as-a-services startups with a presence in the US and firms linked to incubator Y Combinator are among entities that will feel the heat of the Silicon Valley Bank collapse but the impact is likely to be short-term.
