Silicon Valley Bank collapsed on Friday and following its seizure by regulators with the Federal Deposit Insurance Corporation (FDIC) it has been revealed that the bank was vital to the "climate-tech sector," in addition to it being heavily used by tech companies based in Northern California and many venture-backed companies.
According to Heatmap News, a managing director at climate change venture capital firm Prelude Ventures, Gabriel Kra, said, "Silicon Valley Bank (SVB) was an integral part of the early-stage climate tech community and I hope that they survive in some form to continue that role."
The outlet reports that SVB "bragged" on its website about its support of hydrogen, solar, and energy-storage companies, noting that the bank provided finance to the community solar industry upwards of 60 percent.
The largest residential solar company in America, Sunrun, received a revolving line of credit from SVB before its fall.
Kra said, "They were careful, thoughtful, and willing lenders to early-stage companies."
"As a bank, they were focused on that segment of the ecosystem and they understood the risks they were taking more than a bank that wasn’t focused," Kra added.
Clay Dumas, a founding partner in a climate activist venture fund with money in SVB, Lowercarbon Capital, said, "The downfall of SVB will launch a thousand tweet threads, but right now our focus is securing payrolls for the Lowercarbon portfolio companies whose cash is tied up so they can keep up their planet-healing work."
Before its fall, the bank "sponsored events for climate VCs and startups — including one at the Lake Tahoe Ritz Carlton as recently as last week," according to the outlet.
Kra said many companies that relied on SVB could now face "catastrophic effects."
"Losing access to their cash balance for potentially several months can have catastrophic effects," Kra said "And a small portion of companies in the space are probably looking at that possibility and figuring out how to avoid it."
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