SVB’s crash set to spread the world over, startups worried over deep impact
- IBJ Bureau
- Mar 12, 2023
The fallout from the collapse of Silicon Valley Bank (SVB) is starting to spread around the world.
SVB’s UK unit is set to be declared insolvent and has already ceased trading and is no longer taking new customers. Startup founders are panicking about accessing money and paying employees. On Saturday, the leaders of roughly 180 tech companies sent a letter, calling on UK Chancellor Jeremy Hunt to intervene.
“The loss of deposits has the potential to cripple the sector and set the ecosystem back 20 years. Many businesses will be sent into involuntary liquidation overnight,” they said in the letter seen by the Bloomberg.
The UK is just the beginning. SVB has branches in Canada, China, Denmark, Germany, India, Israel and Sweden too. Founders are warning that the bank’s failure could wipe out startups around the world without government intervention. SVB’s joint venture in China, SPD Silicon Valley Bank Co, is seeking to calm local clients overnight by reminding them that operations have been independent and stable.
“This crisis will start on Monday, and so, we call on you to prevent it now,” UK startup founders and chief executive officers have said in the letter to Mr Hunt. The companies listed in the letter include Uncapped, Apian, Pockit and Pivotal Earth.