HSBC Holding plc is seeking to become a leading bank for venture capital firms and startups globally after building a large team of technology and healthcare bankers in the United States, Hong Kong and Israel, a senior executive said.
The bank is already doing venture-type lending to startup companies in India and will also focus on Singapore, Michael Roberts, CEO HSBC USA and Americas, told Reuters.
HSBC is stepping up in the market when VC activity is slowing due to global market uncertainty in the wake of the Federal Reserve-led monetary tightening.
In the first quarter of 2023, global VC investment was well under $60 billion, down from a peak of over $200 billion in the first quarter of 2022, a KPMG report said.
“In many ways, this is the best time for us to establish this initiative, because we get to really grow with these companies as they continue to grow themselves,” said Roberts.
“We’re going to be able to cover from the smallest to the largest, and do so in a way that is more globally focused than anyone else.”
HSBC hired 42 bankers from Silicon Valley Bank, which collapsed in March, said Roberts. An HSBC team of 10 bankers which focused on late stage lending also joined the team of former SVB bankers.
HSBC also added over 20 bankers in Israel and over a dozen in Hong Kong, focusing on VCs and startups.
In March, HSBC bought the UK arm of Silicon Valley Bank for a symbolic one pound, rescuing a key lender for technology start-ups in Britain. It has 650 employees in the UK and Nordics region.
Roberts said the business will focus on deposit gathering, transactional banking services, and some lending.
After the hiring of SVB bankers, HSBC is facing a lawsuit from First Citizens BancShares Inc, which acquired Silicon Valley Bank following its collapse.
First Citizens sued HSBC last month, accusing it of poaching more than 40 of the failed bank’s employees in order to launch its own U.S. venture banking business.
“We will defend ourselves vigorously,” HSBC’s Roberts said.
“We did everything by the book, knowing that this could be an issue. And so we feel we’re in a very comfortable position from a legal perspective.”
Reuters