Silicon Valley Bank collapse shakes Irish start-ups

13 Mar 2023

Image: © Sundry Photography/

Governments are intervening to protect deposits and reduce the impact of this banking crisis, while the Irish tech sector faces uncertainty from the collapse.

The collapse of Silicon Valley Bank is sending shockwaves across the tech world, with governments and organisations scrambling to handle the impact.

The technology-focused bank went into freefall last week after its stock price plummeted and investors moved to withdraw their deposits. This eventually led to the bank’s closure by US regulators.

Parts of the bank are being sold off while the US Treasury has stepped in to try protect SVB depositors. Meanwhile, the chaos has caused uncertainty among Ireland’s tech start-up sector.

Ian Browne, MD of the NDRC accelerator, said on Twitter that Irish start-ups within its portfolio have been directly impacted by the SVB situation, along with some Dogpatch Labs supported companies.

Browne called for calm and said it is “not a time for panic”, as there is currently a “lot of noise” about the developing crisis and that it is likely the end result will not lead to a loss in funds.

“It will however require time to sort out,” Browne said. “This will mean cashflow difficulties for those affected and the inability to pay staff and suppliers.  Frozen accounts will remain frozen for a period of time.”

Browne said the NDRC is offering support for any affected start-ups, with more than 200 mentors, investors and entrepreneurs in residence for “anyone who needs it”.

Silicon Valley Bank had invested hundreds of millions into Irish companies since it first established a presence here in 2012, with plans to invest more into technology and life sciences businesses here in the coming years.

Carlo Capè, CEO of consulting firm BIP, said the SVB collapse raises concerns for both the global financial system and Europe’s tech sector.

“The loss of a major player in the venture capital market could result in reduced funding opportunities and increased scrutiny on investment decisions, potentially stifling innovation and growth,” Capè said.

“It is crucial that we monitor the fallout from SVB and address funding challenges to ensure that our tech companies are able to continue trading and growing.”

Silicon Valley Bank UK sold

Meanwhile, SVB UK has been bought by one of Europe’s largest banks in a bid to protect customer deposits.

The UK branch has been sold to HSBC, through a private deal that was facilitated by the government and the Bank of England. This deal was done in consultation with the UK Treasury, but no taxpayer money was involved in the transaction.

In a statement, the UK government said SVB UK customers will be able to access their deposits and banking services as normal from today (13 March).

The move was conducted to protect deposits and prevent a banking collapse. The US Treasury took steps to protect deposits yesterday.

“The US banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry,” the US Treasure said in a statement yesterday.

“Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.”

Growing banking crisis

The collapse has spilled over to other banks, as US regulators stepped in to shut down a crypto-focused bank over the weekend.

US authorities have taken possession of Signature Bank, a crypto-focused institution, in a similar attempt to protect deposits. This marks the third major bank that has collapsed in roughly a week, with Silvergate Bank recently announcing its liquidation plans.

The New York department of financial services said Signature Bank has total assets of roughly $110.36bn and total deposits of more than $88bn.

Meanwhile, the company behind the USDC stablecoin, Circle, said it has $3.3bn of its USDC cash reserves with Silicon Valley Bank. The company said it has taken steps to transfer those funds to other banking partners.

10 things you need to know direct to your inbox every weekday. Sign up for the Daily Brief, Silicon Republic’s digest of essential sci-tech news.

Leigh Mc Gowran is a journalist with Silicon Republic