The collapse of Silicon Valley Bank continues to reverberate. Bank stocks have taken the hardest hit in Europe and the US. But, in Asia, the fallout is being felt most by smaller companies already struggling for funding amid depressed investor sentiment.

There is some optimism, however. Asia Pacific is set to be the world’s fastest-growing region this year, buoyed by the recent reopening of China, which should enable it to avoid the slowdowns being expected in other major economies. Some countries in the region, such as South Korea, remain popular with venture capital investors and are continuing to see strong growth in deal volumes.

Still, overall venture capital returns across the Asia Pacific region look set to remain weak in the coming months — a sharp reversal from the near 25 per cent recorded in the three years to 2020. Many lossmaking companies that enjoyed spectacular top-line growth in 2018 — when venture capital spending hit an all-time high — are now facing a reality check of tight funding conditions.