Silicon Valley Bank collapse: It’s impact on Ireland, the great European tech hub
It’s no secret: when it comes to big tech in Europe, Ireland is notably called home. With the likes of Amazon, Facebook (or Meta), Google, Apple and Netflix boasting European headquarters on the Emerald Isle, the country has become known as an epicentre for innovation, particularly for tech giants and startups.
With so many tech layoffs happening across Ireland and the world, the news that Silicon Valley Bank has closed has shaken the Irish tech community to the core. As with a solid piece of fruit in startup land, there are only so many bites that one can take before it gets swallowed in its entirety.
For those out of the loop, Silicon Valley Bank was a state-chartered commercial bank headquartered in Santa Clara, California. It was (before shutting its doors on March 10th) the largest bank by deposits in the world-famous home to startups and major tech players.
According to recent figures from CRIFVision-net, approximately 21,637 new startups were registered in Ireland in 2022. In addition to this, it’s reported that, to date, Silicon Valley Bank has invested up to €270m in Irish startups and companies, with over 100 of those potentially impacted by this latest closure.
Irish Tech World
Silicon Valley Bank was significant to Irish businesses because it was formulated to cater to high-growth companies hungry for much-needed cash injections. Latest reports from the Ireland Strategic Investment Fund (pre-SVB closure) stated the organisation was on course to lend a sizable 275 million euros to tech firms in Ireland by the end of next year. Some Irish companies impacted include Brightflag, Accuris, AMCS, Teamwork, Atlantic Therapeutics and Boxever.
This news came as a blow to startups across Ireland, already experiencing significant turbulence due to growing inflation. Speaking after the news broke, Sarah-Jane Larkin, Chief executive of the Irish Venture Capital Association, said, “We are very limited in this country in terms of additional private sources of capital to match state investment in VC funds.” The main issue is, of course, the small pond of investors that exist in Ireland.
So where do things stand? HSBC Bank has bought Silicon Valley Bank, which could save Irish tech companies from incurring significant losses. When the deal was made, HSBC Group Chief Executive Noel Quinn said it strengthened the commercial banking franchise and enhanced their ability to serve innovative and fast-growing firms in the UK and internationally.
However, future funding for startups based in Ireland could be under threat, with talks taking place between The Ireland Strategic Investment Fund (Isif) and HSBC. Regarding the current situation, ISIF Director Nick Ashmore said he remained hopeful about the current situation and confirmed that its lending capacity to Irish companies had recovered. So it’s good news then for existing Irish startups, but, at present, for those who emerge over the next few years, the future is looking manageable.