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The last few days amount to an eventful and significant week for the global startup ecosystem, including for some of Seedrs’ portfolio companies. You will have seen the news that Silicon Valley Bank (SVB) has been shut down by US regulators and that the Bank of England subsequently announced that it is seeking a court order to place Silicon Valley Bank UK into an insolvency procedure. As a popular bank for startups and high-growth companies, this has created a lot of complexity within the early-stage investing space. The situation is constantly developing, but we want to be as transparent as possible with all investors at every stage, even as things continue to evolve.
Seedrs exposure
Seedrs has no exposure to the SVB failure. Seedrs has never held accounts at SVB or SVB UK so no company or client funds were exposed, and there is no operational impact to Seedrs or Seedrs investors.
Portfolio support
However, we do know that some Seedrs portfolio companies did bank with SVB in the US and/or the UK. We are still determining how many are impacted but are actively reaching out to all companies and will share more updates as we are able. We are currently coordinating support for our portfolio with HM Treasury (HMT) to ensure that it sees the full scope of the impact this could have on the UK tech space. The promising update from the Chancellor Jeremy Hunt this morning demonstrates that they recognise the potential scale of impact.
Looking forward
We have already implemented changes to our due diligence process in light of the situation to protect our investors. Campaigns currently fundraising will be asked to confirm their SVB exposure before campaigns can be completed and SVB exposure will be added to our due diligence process for future campaigns.
At this stage it is still unclear what measures the UK Government will take, so we, like many investors, founders and the wider startup community, will monitor the HMT and Bank of England websites for updates. We will continue to update you on these or any other changes we are seeing and how this impacts the Seedrs community.
Your investment in the startup community over the years has helped drive growth and support innovation in the UK and Europe. Despite these present challenges, we know the Seedrs community will remain a critical part of the startup ecosystem.
Thank you for your support for startups to date and in the future. The ecosystem would not be the same without you.
If you have any questions, please reach out to support@seedrs.com.
Kind regards,
Kirsty Grant
Chief Investment Officer & Managing Director, Seedrs
Moderator Message:
Minor typo fixed (chas49)
Minor typo fixed (chas49)