Silicon Valley Bank’s (SVB) recent failure to continue its operations in Europe has dealt a significant blow to the continent’s tech startups. SVB had filled an important niche for European companies that no other lender could, or would. The US-based bank provided much-needed capital and financial services for many of Europe’s fast-growing technology firms, allowing them access to global markets and investors.
The news came as a shock not only because of the vital role SVB played in supporting tech ventures across the continent but also because it was one of few banks willing to take on riskier investments, such as venture capital funds, early-stage start-ups, and cryptocurrency projects. It is estimated that over $2 billion worth of investments were made by Silicon Valley Bank since it opened its doors in London four years ago; this money helped fuel innovation within some of Europe’s most promising young businesses.
Now with Silicon Valley Bank gone from European shores, these companies are forced back into seeking more traditional sources of financing, which can be difficult due to their lack of experience or resources required by mainstream lenders like banks and credit unions. This setback may slow down growth within certain sectors while others will find ways around this obstacle through alternative means, such as crowdfunding platforms or angel investors.
Read more at WIRED
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