A new clearing bank, launched just two years ago, is among the suitors this weekend weighing up bids to bail out the UK arm of Silicon Valley Bank (SVB).
Sky News has learned that the Bank of London (TBOL), which recently raised funds at a valuation of over $1 billion, is considering making a bid for SVB UK.
News of his interest comes hours after the Bank of England said it would use bank insolvency proceedings to take control of the British operation, which counts thousands of British start-ups among its clients.
This weekend it was unclear how credible an offer from the Bank of London could be given its fledgling status.
A source said it had appointed investment bank Perella Weinberg Partners to advise it on its interest in SVB UK.
The Bank of London’s new finance chief, Gavin Hewitt, was formerly at SVB UK, which could offer an edge in any attempt to acquire the business quickly.
The Bank of London is chaired by Harvey Schwartz, the new chief executive of Carlyle Group, the giant American private equity firm, and City insiders have speculated that Carlyle too could be involved in a bid.
Sources close to Carlyle, however, have tried to downplay any suggestions that he would be interested in participating in a takeover of SVB UK.
THE implosion of SVB’s US-listed parent companywhich was taken under government control, represents one of the largest bank failures since the 2008 financial crisis.
UK depositors are set to receive up to £85,000 as part of the settlement of SVB’s UK arm, sparking fears over the fate of large amounts of funding in the start-up community.
On Saturday, dozens of early-stage companies wrote to Jeremy Hunt, the chancellor, to warn of “an existential threat to the UK’s tech sector”.
In a draft letter seen by Sky News, the founders, including those of Adzuna, Signal AI, JustPark and Thriva, called on Hunt to chime in.
“Most of the most exciting and dynamic tech companies bank with SVB and have little or no diversity where their deposits are held,” the draft letter reads.
“This weekend most of us as tech founders are running numbers to see if we are potentially technically insolvent.
“The impact of this is far greater than our individual businesses.
“The Bank of England’s assessment that the SVB going into administration would have little impact on the UK economy shows a dangerous lack of understanding of the sector and the role it plays in the wider economy, both today and in future”.
The founders warned Hunt, who is due to deliver his budget statement on Wednesday, that the collapse of SVB UK would “cripple the sector and set the ecosystem back 20 years”.
“Many companies will be sent into involuntary liquidation overnight,” they wrote.
“Many other companies, both in the technology sector and in the broader economy – the customers and suppliers of these companies – will be negatively impacted by the failure of these companies.”
Mr Hunt and Treasury officials were kept briefed on Saturday’s preparations for SVB UK’s resolution.
Interpath Advisory is stepping up to manage the UK insolvency process.
A Bank of London spokesman said on Saturday: “The Bank of London does not comment on market speculation.”
