The bank wants to have 1,500 UK tech start-ups as clients in three years
California-based Silicon Valley Bank (SVB), the financial institution with $20 billion (£13bn) in assets, opened its first UK commercial banking branch in London today.
The bank will offer financial services to the UK technology industry, with special focus on start-ups and early stage companies. SVB is aiming to have around 1,500 customers within three years.
Money For The Roundabout
The new UK branch of the American bank has opened its doors at 41 Lothbury Street in the City of London. It offers a full suite of products and services including current and deposit accounts, loans, cash management services, trade finance and foreign exchange.
SVB will be offering loans of between £300,000 and £30 million, targeting the technology sector and Silicon Roundabout in particular. UK companies already working with the bank include Shazam, Mimecast, Adconion and Zoopla.
SVB has three decades of experience dealing with American start-ups, and counts some major tech companies as its clients, including Cisco Systems, Mozilla, Evernote and Pinterest.
According to the company, 50 percent of the venture capital-backed technology and life science companies in the US work with SVB. In contrast to much of the global banking market, it has delivered record results for its fiscal year 2011, with all-time high loan and deposit balances.
“We’ve already lent hundreds of millions in the UK but we’re looking to increase this to billions very quickly,” Phil Cox, SVB’s head of UK, Israel and India, told the BBC.
Since the bank specialises in technology, it will offer tech start-up loans more willingly than a high-street bank. Some of SVB’s more exotic financial products include venture debt, where it can lend money to early stage companies against a future fundraising round by venture capital investors. This means lending to a company that has no revenue.
“The UK has a strong innovation ecosystem with a long tradition that stretches right back to the Industrial Revolution. It is a world leader in innovation that ranks second only to the USA. But one of the biggest challenges that UK start-ups have, is that there is not enough access to funding and that this is stifling innovation and growth,” outlined the problem Phil Smith, CEO for Cisco UK and Ireland.
“The opening of a Silicon Valley Bank branch in London signals a significant step in the evolution of the technology sector in the UK at a time when there is strong government support for a thriving community of local innovation businesses,” said Greg Becker, CEO and President of SVB.
“The UK branch opening is a key milestone for us and, more significantly, an example of how important high-growth technology, life science and cleantech businesses and their investors are to the global economy. Our clients are doing remarkable things. We are excited to be a part of their success and thrilled to be open for business in the UK,” he added.
The opening was welcomed by Chancellor George Osborne, who said the new banking service “is yet more proof that the UK is fast becoming the technology centre of Europe.”
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