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11 March 2023
Background
Silicon Valley Bank was closed by US regulators on Friday, and its ringfenced UK subsidiary bank was put into a resolution process by the Bank of England late on Friday evening. It is expected that in both cases, the regulators will attempt to sell, or break up and sell the two banks, with the objective of restoring operating support for the bank’s customers as soon as possible. Small deposits are likely to be protected, but larger deposits are at risk. In the next few days, at a minimum we can expect operational disruption.
Oxx’s situation as a fund manager
Oxx has sufficient reserves, including funds on deposit with a separate bank, to continue to trade as normal.
Oxx’s funds
All of the Oxx fund entities have cash deposited with SVB. However our policy has always been to maintain low cash balances. Our main funds all have substantial undrawn investor commitments, and are able to operate as normal to fund the current portfolio and new investments.
Oxx’s portfolio companies
Many of our portfolio companies have banking relationships with SVB, and all have relationships with at least one other bank. Most of them were able to transfer the majority of their cash balances out of SVB before it collapsed. The Oxx portfolio is generally well funded with extended cash runways.
We will provide close support and advice to all of the portfolio companies over the coming weeks.
Ecosystem support
Oxx is engaging actively with other fund managers and the BVCA to support the ecosystem more broadly with strategic decision making and to lobby the UK government and regulators to stabilise and restore SVB urgently.
We join the wider family of venture and growth capital investors in declaring our support for Silicon Valley Bank. They have been the best bank for the whole of the innovation ecosystem bar none.
In the event that SVB-UK were to be purchased and appropriately capitalised, we would be strongly supportive and encourage our portfolio companies to resume their banking relationship with them.
