The collapse of Silicon Valley Bank (SVB) in the United States has sent shock waves across Europe, where thousands of tech firms and investors have exposure to the failed lender.
SVB, which specialized in providing banking services to startups and venture capitalists, filed for bankruptcy on Friday after a massive fraud scandal and a run on deposits. The bank had about $100 billion in assets and $90 billion in liabilities, making it one of the largest bank failures in U.S. history.
Over the weekend, the Bank of England seized control of SVB’s UK subsidiary, which had about 16,000 customers and $5 billion in deposits. The UK regulator said it was working to find a buyer for the business and protect depositors’ money.
However, many tech firms and investors in Europe fear they will lose access to their funds or face losses on their loans and investments. According to media reports, around 16 tech and life sciences companies in Europe have disclosed about $190 million in exposure to SVB in the UK and the US.
European banks are also feeling the impact of SVB’s collapse, as they have lent money to SVB or its customers. For example, Deutsche Bank said it had a $300 million exposure to SVB, while Credit Suisse said it had a $450 million exposure.
However, some experts have warned that the SVB collapse could have long-term consequences for Europe’s tech sector, as it could reduce the availability of funding and financing for startups and innovation. They also said that Europe needed to strengthen its own tech ecosystem and reduce its dependence on U.S. banks.