Silicon Valley Bank UK - Update from techUK CEO Julian David

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 the 3000 or so 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.