Silicon Valley Bank targets UK technology sector
Silicon Valley Bank, the US hi-tech bank with $20bn (£13bn) in assets, opened its first UK branch on Monday, offering banking and loan services to the UK tech industry.
By Matthew WallBusiness reporter, BBC News Chancellor George Osborne said the move proves "the UK is fast becoming the technology centre of Europe". The bank will target the technology, life science, private equity and venture capital sectors. Tech companies Shazam and The Foundry are already UK clients. Phil Cox, SVB's head of UK, Israel and India, told the BBC: "We've already lent hundreds of millions in the UK but we're looking to increase this to billions very quickly." Mr Cox said the bank would be making loans of between £300,000 and £30m to established companies looking to expand. "Building on our credentials of supporting technology firms in the US, we are excited to be able to help the UK's entrepreneurs meet and exceed their ambitious goals," he added. Silicon Valley Bank, a subsidiary of SVB Financial Group, counts Cisco Systems, Mozilla and Pinterest, among its US clients. It claims that more than half of all venture capital-backed technology and life science companies bank with the group. In the US it has made $7bn in loans and holds over $17bn of client funds. Julie Meyer, managing partner of the ACE Fund, an early-stage digital seed fund, told the BBC: "What an endorsement of the UK tech scene this is - that an important institution such as Silicon Valley Bank - the beating heart of the Valley - has come to the UK to bank its entrepreneurs. "This should cause the other UK retail banks to work a little harder or think more constructively about how to bank the UK's best high-growth tech firms." Mr Cox argues that existing retail banks are failing to serve smaller tech companies who may not have three years worth of accounts yet or even any sales. The new UK branch is at 41 Lothbury in the City of London. Funding gap In a separate development, a new local bank, Cambridge & Counties, is launching to service established small and medium-sized businesses struggling to find alternative finance. The bank estimates that 60,000 loan and overdraft applications worth £3bn were rejected by banks in the second half of 2011. It will be jointly owned by Cambridgeshire Local Government Pension Fund and Trinity Hall, the Cambridge University college.