{"id":1876005,"date":"2023-03-13T19:13:04","date_gmt":"2023-03-13T23:13:04","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/canadas-tech-start-ups-face-financing-hurdles-with-svb-collapse\/"},"modified":"2023-03-13T19:24:22","modified_gmt":"2023-03-13T23:24:22","slug":"canadas-tech-start-ups-face-financing-hurdles-with-svb-collapse","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/canadas-tech-start-ups-face-financing-hurdles-with-svb-collapse\/","title":{"rendered":"Canada\u2019s tech start ups face financing hurdles with SVB collapse"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fcanadas-tech-start-ups-face-financing-hurdles-with-svb-collapse%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1876005&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p> <\/p>\n<div class=\"entry-content\">\n<p>Maiya Keidan, Divya Rajagopal<\/p>\n<p>TORONTO (Reuters) \u2013     Last week&#8217;s sudden collapse of Silicon Valley Bank (SVB) could choke funding for Canada&#8217;s technology start-ups and place them in the hands of domestic lenders who may be more selective in financing new ventures, financiers told Reuters.<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\" style=\"min-width: 320px;min-height: 50px;text-align: center\">  \t  \t\tgoogletag.cmd.push(function() { googletag.display(&#8216;div-gpt-ad-1663871513696-art-1&#8217;); });  \t  <\/div>\n<\/p>\n<p>This would be bad news to a sector that suffered a major setback in 2022. Investors have become more cautious in the early stages of investments.<\/p>\n<p>&#8220;I would say this is probably the worst possible time (for this to happen) in the last decade because of the tech pullback we&#8217;ve had,&#8221; said Neil Selfe, CEO at advisory INFOR Financial. <\/p>\n<p>SVB&#8217;s Canadian Division, which was granted a license in 2019, competed with other banks and private lenders to finance the growth of Canada&#8217;s technology sector. It collapsed on Friday. From the previous year, it had increased its secured loans by doubling their amount to C$435million ($314 million) in 2022.<\/p>\n<p>Canada was now known as the second-largest global tech hub after Silicon Valley, Kim Furlong of Canadian Venture Capital and Private Equity Association, told CBC News Monday.<\/p>\n<p>Shopify Inc, a Canadian tech success story, was one of the examples. This helped to attract more investments in the sector.<\/p>\n<p>After the SVB collapse, U.S. regulators intervened on Sunday. They were after a large bond portfolio that was being redeemed.<\/p>\n<p>CIBC and Royal Bank of Canada were most likely banks to take SVB&#8217;s current books and future clients in Canada. John Ruffolo, Managing partner Maverix Private Equity (a Toronto-based PE firm), said.<\/p>\n<p>Each bank has dedicated technology lending groups.<\/p>\n<p>RBC&#8217;s spokesperson declined to comment, while CIBC &#038; BMO didn&#8217;t respond to inquiries for comment.<\/p>\n<p>Selfe from INFOR Financial stated that SVB Canada was a smaller competitor. &#8220;it was an important competitor in that market.&#8221;<\/p>\n<p>&#8220;I think Canadian banks will continue to lend to earlier stage technology companies but without Silicon Valley Bank as a lender, I think they can afford to be much more selective in who they lend to and potentially increase the price at which they lend.&#8221;<\/p>\n<p>Canada&#8217;s top six banks hold more than 80% in banking assets. This industry has been under fire from politicians and advocates for consumers.<\/p>\n<p>Benjamin Bergen, President at Council of Canadian Innovators (a lobby group for Canadian technology firms), agreed.<\/p>\n<p>&#8220;Before SVB went down, accessing capital was increasingly becoming tighter and tighter for Canadians for startups for scale ups,&#8221; He said.<\/p>\n<p>&#8220;And with this, really what we&#8217;re hearing from the ecosystem is, you know, it is going to make it even more difficult, so that&#8217;s really what we&#8217;re monitoring.&#8221;<\/p>\n<p>According to Refinitiv data Canadian venture capital investments totalled C$1.3billion ($947.38m) in 2018. This is compared to C$4.5billion over the first three month of 2022, and C$3.5billion over the same period of 2021.<\/p>\n<p>Due to rising interest rates, it was already becoming difficult for start-ups to get funding. Due to the possibility of a recession, investors were also becoming more selective. Apart from the banks, there is also a Venture Capital Catalyst Initiative program by the federal government that invests into promising Canadian technology companies. <\/p>\n<p>($1=1.3722 Canadian dollars)<\/p>\n<\/p>\n<p> (Additional reporting by David Ljunggren, Ottawa; Reporting by Maiyakeidan and Divyarajagopal; Editing done by Edward Tobin<\/p>\n<p><a href=\"https:\/\/www.oann.com\/business\/canadas-tech-start-ups\/attachment\/customers-wait-in-line-outside-a-branch-of-silicon-valley-3\/\"><\/a><\/p>\n<\/p><\/div>\n<p><\/p>\n<hr>\n<p>&#8220;From <a href=\"https:\/\/www.oann.com\/business\/canadas-tech-start-ups\/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=canadas-tech-start-ups\">Canada&#8217;s tech start-ups face financial hurdles due to SVB collapse<\/a>&#8221;<\/p>\n<hr>\n<p><span style=\"font-size:11px\"><em>&#8220;The views and opinions expressed here are solely those of the author of the article and not necessarily shared or endorsed by Conservative News Daily&#8221;<\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Maiya Keidan and Divya Rajagopal TORONTO (Reuters) \u2013 Last week\u2019s sudden collapse of Silicon Valley Bank (SVB) could choke funding for Canada\u2019s technology start-ups and place them in the hands of domestic lenders who may be more selective in financing new ventures, financiers told Reuters. That would be bad news for a sector that<\/p>\n","protected":false},"author":1,"featured_media":1889983,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[542],"tags":[8004,7385,13460,21550,3732,21356,4989],"class_list":["post-1876005","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-oann","tag-canadas","tag-collapse","tag-financing","tag-hurdles","tag-start","tag-svb","tag-tech"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1876005","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1876005"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1876005\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1889983"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1876005"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1876005"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1876005"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}