Canada should support startups after SVB collapse, says lobby group
TORONTO (Reuters) - A lobby group for Canada's venture capital and private equity funds is asking Prime Minister Justin Trudeau's government to provide emergency financing to help startups hit by the collapse of Silicon Valley Bank (SVB), according to a letter seen by Reuters on Thursday.
Canada's technology startup sector is expected to face hurdles in finding replacement financing after the failure of U.S.-based SVB, which had C$435 million ($316 million) in secured loans in Canada in 2022, said the letter sent on Sunday morning.
"Over the longer term, there will be ripple effects now that the largest and most aggressive bank lender to the American VC ecosystem is gone," Kim Furlong, the Canadian Venture Capital and Private Equity Association chief executive officer, said in the letter to Trade Minister Mary Ng.
Spokespeople for Ng and Finance Minister Chrystia Freeland's office could not immediately be reached for comment.
Reuters reported on Monday that the sudden collapse of SVB could choke funding for Canada's technology start-ups and place them in the hands of domestic lenders who may be more selective.
The letter noted some Canadian banks have stepped up and advanced credit facilities to Canadian companies but SVB's collapse may lead to job losses and asked the government to relax terms of a separate public-private financing partnership to accelerate venture capital flow to companies.
The letter also asked the government to instruct the Business Development Bank of Canada to deploy a bridge financing program similar to the one used at the outset of the COVID-19 pandemic.
($1 = 1.3755 Canadian dollars)
(Reporting by Maiya Keidan, additional reporting by David Ljunggren; Editing by Josie Kao)