Statement from techUK on the sale of Silicon Valley Bank UK to HSBC
Following the collapse of the US based bank ‘Silicon Valley Bank’ on Friday 10 March, its UK arm ‘Silicon Valley Bank UK’ was placed in insolvency.
Silicon Valley Bank UK (SVB UK) held loans of around £5.5bn and deposits of around £6.7bn with thousands of customers. These customers are a blend of venture capital firms, tech start-ups and other tech businesses.
While the collapse of SVB UK would not have posed a systemic risk to the overall UK financial system, the bank was a major player in the UK tech sector and its collapse put a significant proportion of UK tech firms and venture capital backed businesses at risk.
The affected tech firms were at risk of not being able to access bank deposits and cash to pay staff, pay for facilities such as rent or run their businesses properly from Monday, 13 March. There are currently 6,369 active U.K. start-ups with at least £500,000 of funding. These start-ups employ 1.8 million people and many of them would have been at risk of closure should a recue deal not have been agreed.
techUK has engaged in talks with the Department for Science Innovation and Technology (DSIT) and HM Treasury alongside others from the UK tech and start-up ecosystem since news of the collapse of the Silicon Valley Bank and the insolvency of SVB UK.
The consistent call to action was for the Government to facilitate a solution to protect the deposits and cash flow of at-risk firms who, due to no fault of their own, were put in this position.
Protecting these firms is vital for the future of the UK economy. Start-ups provide the bedrock of the UK tech sector which adds over £150bn to the UK economy every year. Letting these companies fail would have been incompatible with the Government’s objective to make the UK and science and tech superpower.
We are therefore delighted to see that a sale has been agreed with HSBC that will allow SVB UK customers to access their money and resume business operations today. This sale has been worked on at pace by DSIT and Treasury civil servants and the Government deserves significant credit for acting quickly to protect a vital part of the UK’s economy, both for today and for the future benefits these firms will bring.
You can read more on the sale of SVB UK to HSBC here.
techUK’s CEO Julian David joined calls over the weekend with the Government on the sale of SVB UK. A statement from Julian can be found below:
I am sure most of you will have seen the good news that there is a resolution to the crisis in the tech startup and scaleup ecosystem brought about by the collapse of Silicon Valley Bank in the USA and the subsequent insolvency of SVB UK.
It has been a hectic and very alarming weekend for many of us in tech sparked by the news but also by the initial comment from US and UK financial regulators that this was not a systemic issue for the relevant Financial Services Sectors given the relative size of SVB and SVB UK. ‘Keep Calm and Carry On’ has often been a useful message but in this case for the tech sector it was a mistaken one. It failed to address the huge impact of the concentration in the tech startup and scaleup sector of its thousands of clients SVB UK is reported to have and its role as not just an investor but as the primary bank for these companies. Without access to their deposits these companies faced the prospect of not being able to pay staff or rent or suppliers – in short many would also be facing insolvency and the many thousands of people working in this part of the tech sector would be very worried about their jobs!
So, it was very reassuring to have a fast response government in the UK led from the top by the Economic Secretary to the Treasury and the Secretary of State at DSIT on Saturday which convened techUK and many other organisations across the spectrum of tech and financial services sectors to hear from us directly about the exact nature of the problem and to assure us that the government gets it. Its objective was to protect the firms making up the core of new companies in so many areas from financial services to biotech.
As always reassurance is helpful but of course we all wanted to see what would happen, especially after the US government announced measures to protect their companies deposits last night.
Well now we have it. The government has produced a solution with the help of the Bank of England and has announced that Europe’s largest bank HSBC has acquired SVB UK and customers of SVB UK will be able to access their deposits and banking services as normal from today.
It has been a turbulent time for UK tech after a difficult economic backdrop throughout 2022 with companies facing many adjustments to business models. But it also remains a place of opportunity and as the engine of growth for the UK it has the ability to address the challenges we face in the UK. So, it is extremely encouraging to see, right from the top of government including the PM and the Chancellor as well as our own new Science and Technology Department, this commitment to tech and our companies and to see them demonstrate the speed we need to enable becoming the Science and Tech Superpower that we all want.
- Julian David, CEO techUK
Julian David is the CEO of techUK, the leading technology trade association that aims to realise the positive outcomes of what digital technology can achieve through innovation and collaboration, and serves on its board of directors.
Julian led the transformation of techUK from its predecessor Intellect in 2015, putting an increased focus on the growth and jobs the technology industry offers in a global economy. He has since led its impressive expansion driving forward the tech agenda in key areas such as skills, digital ID and public sector transformation, now leading techUK’s 70-strong team and representing over 850 member companies, comprising of global and national champions and more than 500 SMEs. In 2020, techUK joined forces with TechSkills, the employer-led organisation that aims to improve the talent flow of talent into the digital workforce.
Julian represents techUK on a number of external bodies including the Digital Economy Council, the Cyber Growth Partnership and the Department of International Trade’s Strategic Trade Advisory Group. He also sits on the Executive Board of DIGITALEUROPE and is a member of the Board of the Health Innovation Network the South London Academic Health Science Network.
Julian has over thirty years of experience in the technology industry. Prior to joining techUK, he had a long career at IBM culminating as Vice President for Small and Medium Business and then Public Sector. After leaving IBM he worked as a consultant helping tech SMEs establish successful operations in the U.K. His personal interests include Football (West Ham and Real Madrid) and Art.
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Margherita is the Head of Press and Media at techUK, working across all communications and marketing activities and acting as the point of contact for media enquiries.
Margherita works closely with the staff at techUK to communicate the issues that matter most to our members with the media.
Prior to joining techUK, Margherita worked in public relations across technology, public affairs, and charity, designing evidence-based strategic campaigns and building meaningful ties with key stakeholders.
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As Associate Director for Policy Neil leads techUK's domestic policy development in the UK. In this role he regularly engages with UK and Devolved Government Ministers, senior civil servants and members of the UK’s Parliaments with the aim of supporting government and industry to work together to make the UK the best place to start, scale and develop technology companies. Neil also acts as a spokersperson for techUK on UK policy in the media and at Parliamentary Committees.
Neil joined techUK in 2019 to lead on techUK’s input and engagement with Government on the UK-EU Brexit trade deal negotiations, as well as leading on economic policy. He has a background in the UK Parliament and in social research and holds a masters degree in Comparative Public Policy from the University of Edinburgh and an undergraduate degree in International Politics from City, University of London.
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Juliet leads the communications, brand, marketing, events and membership teams for techUK. Working closely with the digital, market and policy teams, Juliet will also strategically address how best we can engage with potential members, support our existing members, and offer real value for all our members and stakeholders.
Juliet is a global brand, communications, marketing and stakeholder expert having worked in the membership sector for almost twenty years and for significant brand and marketing agencies prior to that. She has experience building and growing brands across international territories, growing memberships, and advancing the profile of flagship events and activity to gain national and international partnerships, media coverage and engagement.
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- 07909 917396