Loans for startups—even if they're still making losses—could soon become a reality in Germany, too. Silicon Valley Bank (SVB) is taking the plunge and opening its first branch on the European mainland in Frankfurt.
Founded in 1983, SVB provides loans to startups, lends money to investors, and provides capital to innovative medium-sized companies. According to its own statements, it has financed more than 30,000 startups in this way. In addition, the bank also sees itself as a service provider and advisory firm for other high-tech investors.
Germany is an extremely exciting market
SVB has had a presence in London since 2004, and now also on the European mainland, namely in Germany. The startup bank apparently also considered opening a branch in France or a Scandinavian country, but ultimately, according to Handelsblatt Global, it was "ultimately drawn to Germany by the depth and energy of its startup scene." Jörg Zeuner, Chief Economist of KfW, commented on the SVB’s decision to Handelsblatt Global that it is a “good sign for Germany as a location for startups.” Phil Cox, Head of EMEA and President of Silicon Valley Bank UK, welcomes the bank’s entry into the German market:
"Germany is an extremely exciting market for us, and this step represents an important milestone. We have been observing the positive development of the innovation economy in Germany for some time now. Therefore, we believe that entering the German market is only logical after successfully establishing our presence in the UK. With a strong local team, we will cover all technology and venture markets in Germany from our Frankfurt office, serving as a strong partner to entrepreneurs, venture capitalists, and private equity firms."
Lilium and eGym are among the customers
SVB, which is one of the 50 largest banks in the USA, could make an important contribution to startup financing in Germany. Until now, it has been almost impossible for startups in this country to obtain a loan from their main bank.
That could now change, as SVB's financing options are aimed at both innovative companies and their investors. The bank's service portfolio initially includes lending to companies in the technology and life science sectors, as well as financing acquisitions and working capital. SVB's clients include German companies such as HelloFresh, Lilium, Babbel and eGym as well as European players like Secret Escapes and US giants like Pinterest and Zendesk. The SVB Frankfurt team includes Christian Hoppe, who built the main incubator for Commerzbank.
