The German start-up community is optimistic that the consequences of the collapse of Silicon Valley Bank will be contained.
The chairman of the German Start-up Association, Christian Miele, says he does not believe that there will be major financing problems for the industry in Germany because of the collapse of the US start-up financier.
"At its origin, this is not a start-up crisis. It is about the refinancing problems of a bank," he said in Berlin.
"I am confident that there will be no major restraint among venture capitalists across the board," he said, though he conceded that the consequences for German start-ups could not yet be conclusively assessed.
Silicon Valley Bank's branch in Germany, which was closed by the financial regulator Bafin on Monday, did not operate a deposit-taking business. However, some start-ups in this country had taken advantage of the offers of the British SVB subsidiary, Miele said.
The takeover by the major British bank HSBC seemed to ensure that German start-ups with deposits there would have access to their money again. "This was an important step to avoid short-term liquidity bottlenecks for affected German start-ups," he said, adding that the securing of all SRP deposits by US authorities has defused the situation in the US.
Miele also said that special loans for fast-growing companies - which SVB specialised in - were not common in Germany.
The Californian Silicon Valley Bank (SVB), which specialises in start-up financing, was closed on Friday after a failed emergency capital increase and placed under state control. Previously, customers had withdrawn a lot of money in a short period of time. The US Federal Reserve has announced an investigation.
The collapse of the bank comes at an inopportune time for the German start-up sector. Rising interest rates have discouraged lenders from investing large amounts of capital, leading them to shy away from risky business models.
While the start-up sector celebrated a record year in 2021, financing for German start-ups collapsed in 2022. As a result, the valuations of start-ups collapsed and some growing companies ended up cutting jobs.
The Federal Ministry of Economics and Technology did not comment specifically on Monday on what effects the collapse of the SVB could have on the German start-up sector. However, a spokeswoman pointed out start-ups in Germany did not have to rely solely on banks - there are also state funding programmes and private investors.
