Toronto, tvonenews.com – The sudden collapse of Silicon Valley Bank (SVB) last week has begun to stifle funding for Canadian startups and put them in the hands of domestic lenders who may be more selective in funding new ventures.
That would be bad news for the struggling sector in 2022, leaving investors more risk averse in early-stage investments.
“I would say this is probably the worst time (for this to happen) in the last decade because of the technological setback we’ve been through,” said Neil Selfe, CEO of Advisory INFORM Financial.
The Canadian division of SVB, which received an operating license in 2019, was competing with other banks and private lenders to help fund the growth of Canada’s tech sector, before collapsing on Friday (03/10/ 2023). SVB Canada doubled its secured loans to C$435 million (US$314 million) in 2022 from the previous year.
Canada is known as the world’s second-largest tech hub after Silicon Valley, Kim Furlong, CEO of the Canadian Venture Capital and Private Equity Association, told CBC News Monday (3/13/2023).
Companies such as Shopify Inc are examples of Canadian technology success stories, helping to attract more investment into the sector.
US regulators intervened on Sunday (3/12/2023) after the collapse of the SVB, which took place after a large bond portfolio was hit.
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