What the Silicon Valley Bank Collapse Means for Science Start-Ups

The collapse of Silicon Valley Bank (SVB) March 10th sent science and technology start-up companies into chaos, and has left many questioning where investment will come from in future. SVB was known for funding technology start-ups. Its location in Silicon Valley, a region in the San Francisco Bay Area of northern California, meant that many of these were green-energy or biotech companies.

The SVB collapse is symptomatic of the troubles facing the wider financial environment, says Matt Lilley, president of Hult Business School in London. “The environment was getting much tougher for venture-capital funding,” he says. “I think [the collapse] is an effect rather than a cause, and the broader cause is rising interest rates.” He predicts that even without SVB, decarbonization start-ups will continue to attract investment in the United States, because of the US government’s Inflation Reduction Act, which incentivizes investment in clean technology.