Local startups are regaining access to their SVB deposits: At least five local and regional startups have regained access to their deposits at the collapsed Silicon Valley Bank (SVB), Enterprise learned yesterday from sources in the know. One of the firms has already initiated a transfer order to take the company’s deposits out of the US banking system, while the remaining four have either made partial transfers or are keeping the entirety of their deposits at SVB while they assess alternative banking options.

ICYMI- US authorities moved on Sunday to guarantee all deposits held at SVB in emergency measures aimed at preventing contagion and a wider crisis in the banking sector. Typically, only the first USD 250k is insured under US law.

Wait — why aren’t startups racing to pull their deposits from SVB? “It's counter intuitive, but actually a lot of companies have decided to at least leave some funding” at SVB, Acasia Ventures Managing Partner Aly El Shalakany told Enterprise yesterday. “Communication from the US regulator has been pretty unequivocal so in a way, ironically, SVB is probably now among the most protected banks in America,” he said.

REMEMBER- Scores of Egyptian startups banked with SVB: As many as 46 local startups and two VC firms (one of them global) have been said to have been banked with SVB. Two of Acasia’s 10 portfolio firms across the MEA region were affected, while fintech fund Nclude’s Basil Moftah told us that one of the VC’s eight portfolio firms banked with SVB.

Fawry wasn’t one of them: The fintech giant confirmed (pdf) yesterday that it is not banked with SVB or any other bank in the US, in a statement to the bourse (pdf).

Some technical glitches: “SVB’s system was unstable and in some cases depositors had technical difficulties setting up wire transfers, most likely due to high demand,” El Shalakany told Enterprise yesterday, adding that those he knows of who weren’t able to make transfers on Monday were able to do so on Tuesday.

Some firms are resorting to neo-banks: Some startups are moving their deposits to neo-banks or digital-only banks of the likes of Mercury Bank, several sources told us. Mercury has simplified its onboarding procedures for depositors exiting SVB in a bid to capture a larger market share, one startup exec said. Neo-bank Tribal Credit — founded by Egyptian Amr Shady — launched an initiative offering accounts to SVB-exposed businesses in MENA, Mexico and the US, Shady said on LinkedIn.

But that won’t be a long-term solution: Neo-banks “work as a short-term stop-gap but in the long term you’re not really better off,” El Shalakany says. “The holy grail is to create a relationship with a top-tier bank that’s more secure,” he told us, adding that Acasia is now working to help its depositors secure alternative banking relationships.

Diversification is now the name of the game: “The crisis has been averted, but the work that we are doing now is to help companies think about what’s next in terms of future safeguarding,” El Shalakany told us. “That’s also a question for us to think about as a VC. We need to consider our banking relationships and think about diversifying,” he added.