The acquisition of Silicon Valley Bank UK will enable HSBC to expand its presence in the technology industry and further develop its fintech capabilities.
After the sudden collapse of US Silicon Valley Bank, HSBC Holdings decided to buy SVB’s UK division for £1 (US$1.21). After lengthy negotiations involving the UK government, regulators and a consortium of private equity firms, the deal was a move to save UK tech startups from imminent implosion.
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Financing UK tech companies
The collapse of SVB UK, which reportedly has about 3,300 UK clients, including startups, venture-backed firms and funds, after California-based Silicon Valley Bank failed to meet exit demands in the US. The possibility raised concerns for British technology and life. scientific industry.
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UK tech companies are experiencing a degree of funding shortfall, with some unable to access funds they had in SVB UK.daily mail report UK tech companies, including Pinterest and online retail giant Shopify, were affected as they struggled with payroll withdrawals.
how’s it going, Bank of England statement On March 10, it said it was prepared to apply to the courts to put SVB UK into bank insolvency proceedings in the absence of material intervention.
However, HSBC’s intervention will ensure all deposits are secured, so technology leaders and startup founders are expected to continue banking as usual.
“This action was taken to stabilize SVB UK, ensure continuity of banking services, minimize disruption to the UK technology sector and support trust in the financial system.” Bank of England said in a press release After the contract is signed.
HSBC Group CEO Noel Quinn said in a statement: “This acquisition is of great strategic importance to our business in the UK. It will strengthen our commercial banking franchise and It will strengthen its ability to serve innovative and fast-growing companies in the UK and internationally, including those in the technology and life sciences sectors.
“We look forward to welcoming SVB UK customers to HSBC and helping them grow in the UK and around the world. so you can safely continue banking as normal.”
To what extent has the UK tech industry been affected?
SVB UK operates as a technology-friendly financial institution, helping many UK technology companies with loans and savings. economic timesabout 16 technology and life sciences companies in Europe have disclosed exposure to SVB of more than £156.1m (US$190m) in the UK and US. was affected prior to the HSBC acquisition.
Global review platform Trustpilot Group has confirmed that the company failed to transfer $18 million from the total amount held in SVB UK. Another tech company, Daceutics, was unable to move funds out of its bank when news of its possible bankruptcy spread.situation Caused Daceutics to temporarily suspend AIM trading.
Following these events, some 210 businesses and start-ups sent an open letter to UK Prime Minister Jeremy Hunt at the Treasury Department asking for financial assistance.
The letter included Zoom Video Communications, GitHub, Stripe, DocuSign, Atlassian, Coursera, Slack Technologies, Eventbrite, Fitbit, GoPro, Twilio, Box, Asana, Cloudera, Dropbox and SurveyMonkey — all calling on the UK government to take urgent action. I asked.
What this means for UK tech leaders
The UK startup space has witnessed significant growth in technology investment last year, which would have been hit hard without government intervention.according to eweekIn 2022, the UK ranked second in global start-up funding with £12.7 billion (US$15.47 billion) of technology investment. The record surpasses the UK over China and India, signaling the new wave of digital acceleration promised by the UK government. More financial and regulatory support for the tech industry in the country.
A timely government intervention prompted HSBC’s takeover of SVB and restored hope among domestic tech investors. Some technology leaders have also reacted to this development. Dom Harras, Executive Director of the Digital Economy Coalition, said: murmured It said the government’s action “saved hundreds of the UK’s most innovative businesses”.
“It is great news that HSBC is acquiring SVB UK. Tweet.
Meanwhile, in the US, the financial and tech sectors are still struggling to fully recover from the SVB collapse. A joint effort by the US Federal Reserve Board, the Treasury Department and the Federal Deposit Insurance Corporation to address parent company issues.first aid recently announced We support banks and ensure depositors’ money is safe.
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