Members of Canada's technology sector say they're worried the collapse of the Silicon Valley Bank will have a chilling effect on investments in their sector. A pedestrian carries an umbrella while walking past a Silicon Valley Bank Private branch in San Francisco, Tuesday, March 14, 2023. (AP Photo/Jeff Chiu)
TORONTO – Members of Canada’s technology sector say they’re worried the collapse of the Silicon Valley Bank will have a chilling effect on investments in their industry.
Chris Albinson, chief executive at Communitech, says Canadian companies that didn’t even bank with SVB will feel the effects of its collapse, especially when fundraising.
He already saw a company in Canada without ties to SVB lose out on an investor who was spooked by the bank’s collapse and decided not to dole out cash to new ventures. The Canadian company ended up having to layoff half its staff.
Albinson estimates 10 per cent or 120 of the 1,200 founders his Waterloo, Ont. innovation hub deals with were impacted by the bank’s fall with many worried about how they’d cover salaries in the near-term.
The president of the Council of Canadian Innovators is just as worried that the “chilly” environment for venture funding will go from “bad to worse” because of SVB’s closure.
Benjamin Bergen says the bank’s collapse is likely to limit the pool of capital that companies can potentially access.
This report by The Canadian Press was first published March 15, 2022.
