Sunday 21 July 2019

Silicon Valley Bank commits pot of $300m to tech and life sciences

The $300m in credit is backed by the Irish Strategic Investment Fund. Photo: Getty
The $300m in credit is backed by the Irish Strategic Investment Fund. Photo: Getty

Shawn Pogatchnik

Silicon Valley Bank is providing $300m (€266m) in credit to Irish technology and life sciences companies, a pot backed by the Irish Strategic Investment Fund (Isif).

The agreement between the specialist US lender and the State development fund announced yesterday.

Silicon Valley Bank (SVB), the leading corporate banker in California's dot.com heartland, entered the Irish corporate finance market in 2012 and since has provided €226m to 29 Irish tech and medical sciences companies.

That list includes Accuris, AMCS, Atlantic Therapeutics, Boxever, Clavis Insight, Drop, Glofox, Movidius and Profitero.

Typically the bank lends to early-stage companies that have yet to make a profit and structures its loan terms around the expected growth cycle of startups.

The bank has 28 offices across the USA and bases in the UK, Germany, Israel and China.

The bank says its new €300m credit line will be deployed over the coming five years. Isif, in turn, will deepen its existing investments in SVB Capital-managed international funds.

"The Irish innovation sector has experienced incredible growth since we began working with the Ireland Strategic Investment Fund in 2012. We're proud to continue this great relationship and work with a growing roster of Ireland's best tech companies," said John China, president of SVB Capital.

Speaking at the launch, Finance Minister Paschal Donohoe said Silicon Valley Bank's deepening commitment in Ireland "is a concrete example of Isif's strategy to leverage into Ireland private-sector investors willing to invest in innovative Irish startups to the benefit of the Irish economy".

He said despite Ireland's strong economic rebound in recent years, specialist lenders such as Silicon Valley Bank were needed "to provide a level of support that the banks sometimes are unwilling to provide".

Minister Donohoe also held a private meeting with Silicon Valley Bank leaders at Glofox, founded by former Connacht rugby scrum-half Conor O'Loughlin.

"Silicon Valley Bank has been a great supporter of Glofox as we continue to grow and develop new solutions for our clients," Mr O'Loughlin said.

"Glofox was founded to help passionate fitness entrepreneurs be successful running their business and we needed a financial services provider that understood the complex needs and quick pace of founders and their growing startups. We found that partner in SVB."

Fergal McAleavey, senior director of private equity and venture capital at Isif, said its partnership with Silicon Valley Bank would ensure that Irish tech and life sciences companies can tap sufficient financing to "help them to grow and thrive. This commitment is fully aligned with Isif's strategic investment focus on supporting the growth of indigenous companies."

He said as part of the deal, Isif would deepen its investment in SVB Capital's so-called "fund of funds," which offers investors a stake in a globally bundled portfolio of venture capital investments.

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