UK tech ecosystem reacts to the news of SVB UK acquisition by HSBC
U.K. tech founders, investors, and ecosystem leaders have been giving their reactions to the news that SVB UK will be rescued by HSBC. The bank purchased the operation for a nominal £1 overnight, averting insolvency proceedings that were due to start this morning. It said that it will be “business as usual” for its customers, despite the many question marks still hanging over Silicon Valley Bank in the U.S.. The storied parent company is the bank for many tech startups, investors and others in the industry and it too was taken over by banking regulators at the end of last week when customers made a run on it.
Andrew J Scott
“It was vital that depositors in SVB UK, who were overwhelmingly UK tech startups, were protected, not just for the startup ecosystem but the whole of the UK. Many of these companies are developing technologies which represent the future of the UK economy. The future of literally everything in our lives is tech. HSBC buying SVB UK means no public money has been used to ensure these startups, and many of the investors like us who back them, don’t go bust. It’s a great result for UK plc.”
It was vital that depositors in #SVB UK, who were overwhelmingly UK tech startups, were protected, not just for the startup ecosystem but the whole of the UK. Many of these #startups are developing technologies which represent the future of the UK economy. The future of literally… https://t.co/57yKJHWTmR
— Andrew J Scott 🐧 (@andrewjscott) March 13, 2023
“SVB is the lung of the innovation economy. We were looking at emergency loans and dire months ahead for a number of our founders who could not make payroll. Now we can go back to building. This happened without spending a tuppence of taxpayer money and in a remarkable amount of time.”
1/2 Exemplary job by @bankofengland (Andrew Bailey, Sam Woods at the PRA), @Jeremy_Hunt and his team at @hmtreasury in the sale of SVB-UK. Took control, gave everyone confidence, executed on a sale in incredibly tight conditions.
— Fred Destin (@fdestin) March 13, 2023
Samira Ann Qassim
Pink Salt Ventures
“We have been on crisis alert since Thursday, working with portfolio companies to make calls on their available capital, sharing resources and ensuring our own exposure was limited. Dom Hallas (of Coadec) worked tirelessly this weekend behind the scenes keeping up momentum with [the government], while the broader community came together to share support, resources and take action. It’s been inspiring to see. As emerging managers currently fundraising, we knew alternatives could literally spell doom for us. From the prospect of a full blown financial crisis to a loss of deposits, and a more contained tech crisis, resources would inevitably (and rightly) have to flow to mission critical companies and funds to keep the sector afloat. Early stage investors and founders would go to the bottom of the stack until the mess got sorted. In entrepreneurship, timing is everything, protracted periods of inactivity and sluggishness can be the difference between success and failure. The stakes couldn’t have been higher, what a huge relief that the best option went through. Armageddon avoided, let’s get back building.
As emerging managers, the alternatives would have spelt doom for us. Inevitably in crisis resources flow to mission critical (big funds and companies) and dry up for the upstarts. Now we can continue building for tomorrow’s legendary female founders. 😮💨🙏🏼❣️
— PINK SALT VENTURES (@pinksaltvc) March 13, 2023
CEO & co-founder
“Enormously relieved, and somewhat in awe at the speed and agility of the Treasury and Bank of England over the weekend. This was a sign that Hunt could put his money where his mouth was, as a ‘former entrepreneur’ (in edtech, no less!), and step in to support the future of UK tech and economic growth at a critical time for the ecosystem. We can now all go back to building, investing, and innovating in the technologies that will improve the future of our economy, climate, health, and education.
Enormous respect and appreciation for @hmtreasury and @bankofengland teams this morning – and great relief felt by the UK tech sector – for their tireless weekend work to facilitate purchase of SVB by @HSBC. This was an extinction risk weekend for a huge % of UK startups.
— tobymather (@tobymather) March 13, 2023
CEO and Ce -Founder
“We are a UK headquartered company developing quantum computers with 40 employees. Most of our money was locked up at SVB UK. The last 48 to 72 hours have been incredibly stressful scrambling to put in place mitigation strategies to deal with the fallout. Huge thanks go to the UK government and HSBC. Had they not intervened this would have been a disaster for UK tech and the longer term tech leadership prospects for the UK.”
Rajeeb Dey MBE
“SVB has been an integral part of the global technology ecosystem. As a client of theirs and also a company that has a lot of tech sector clients the repercussions of allowing SVB to fail [in the U.K.] would have been colossal. The tech sector in the U.K. would have been set back for years if a positive outcome was not achieved. The last 72 hours have been a testament to the entrepreneurial spirit and resilience in the U.K.. COADEC went above and beyond to coordinate the efforts and represent the needs of the tech sector, investors stepped up to share messages of support and reach out to support their portfolio and entrepreneurs were working tirelessly over the last 72 hours to create a Plan B, C or D depending on what happened. Making payroll, paying suppliers, stay alive — these were all major concerns for many in the sector. In the end the entire U.K. tech sector has breathed a sigh of relief with the news of HSBCs acquisition. I just hope they revamp the SVB app and online banking system as soon as possible (for any clients who have used SVB online they will feel my pain 🤣).
Managing Partner IQ Capital, Past Chair BVCA
“This is a fantastic result for founders and the whole tech industry. The BVCA worked tirelessly, bringing together VCs and their portfolio companies to demonstrate and evidence with data the depth of the crisis and how to work toward a solution with government. The Government, HSBC, and the U.K. SVB team deserve huge credit for getting this over the line so quickly to provide certainty for U.K. tech sector.”
Influencer.com & Creator Ventures
“I was surprised over the weekend by how some people seemed to place some blame with the depositers and said they should have known better than depositing money with a bank like SVB. A bank run must be viewed as a complete disaster rather than a normal risk of doing business. Blaming the startups here was completely misguided. Regulators need to make sure that going forward that depositers at “smaller banks” have greater protections or we should just say goodbye to them as it’s not worth the risk.
I was surprised over the weekend by how some people seemed to place some blame with the depositers and said they should have known better than depositing money with a bank like SVB. A bank run must be viewed as a complete disaster rather than a normal risk of doing business.
— Caspar Lee (@Caspar_Lee) March 13, 2023
In addition, many startup founders and investors pointed to the leg-work done by industry body Coadec, which is now raising funds for further work.
I’m a journalist who specializes in investigative reporting and writing. I have written for the New York Times and other publications.