UK's "attractive ecosystem" drove Silicon Valley Bank's UK debut, says chief

By Sooraj Shah
11 Jun 2012 View Comments
A view of the London tech city

The UK's "attractive ecosystem" could allow Silicon Valley Bank (SVB) to lend billions of pounds to emerging technology businesses, according to the bank's head of UK, Phil Cox.

Earlier today, SVB announced that it would be launching its first branch in the UK to offer commercial banking services to "innovation businesses".

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Cox, who also heads the bank's Israel and India divisions, told Computing that the UK's ecosystem was crucial for the launch of the commercial bank in Britain.

"It's an attractive ecosystem because there are strong universities, a good start-up culture, entrepreneurialism, clusters emerging from Oxbridge and Tech City, and many investors," he said.

Cox explained that data from the US gave the bank further reasons to launch in the UK.

"Looking at our clients in the US, and the accounts that they've opened with SVB in the US that are foreign currency accounts, the number one currency is pound sterling and the next is the euro," he said. "Looking at our payment traffic data about US companies sending money around the world, where they have subsidiary companies when they branch out, the UK comes top of the list every time.

"So it's a very natural evolution for our business to be [in the UK]. We have a business in the US that's lending about $7bn to the technology space and we would not have built the bank without having identified whether there was a significant opportunity in the UK."

SVB has invested in the UK since 2004, and Cox was quick to point out that it has already lent "hundreds of millions of dollars" here, and that it aspires to grow its lending in three to five years to "several billions".

The bank, lauded by chancellor George Osborne earlier today, has three main differentiating factors, according to Cox.

"The first is absolute dedication to the sector," he said. "We don't work in any other sector aside from the technology space, and this means we do not get deflected into the trends of other banking and lending terms.

"The second point is our depth of knowledge, of software, hardware, life sciences, medical devices, social and mobile. This expertise allows us to decide which companies we should lend money to, and which ones we should not.

"Our third differentiator is that for companies in the UK who are trying to raise money, or looking for commercial partners or outsourcing development to low cost economies, our presence in the US, Israel and China can help businesses find their way through those issues," he claimed.

Fred Hessabi, SVP and general manager continental Europe at SAP UK & Ireland, believes that the bank will have a positive impact on the UK's technology industry.

"We have seen various government-led investment schemes for technology start-ups in Britain, but a bank which understands and specialises in financial services for innovation companies is a real game-changer," he said. "There is a wealth of innovative minds out there, and accessible finance is the number one differentiator between bringing an idea to life and leaving it as a drawing on a beer mat.

"Aside from providing an informed service to the bigger players in the technology industry, Silicon Valley Bank's greatest contribution will be with the smaller, entrepreneurial teams which will lead Britain into greater technology innovation in years to come."

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