Tech firms are pumping money into Revolut and Wise amid the demise of Silicon Valley Bank

Inbound volumes from Silicon Valley Bank were 16.6 times normal yesterday, according to Revolut, while today’s remittances could be even higher.

Silicon Valley Bank was shut down by California regulators yesterday after tech companies tried to take money out of business. This morning the Bank of England said it would apply to place SVB’s UK unit in bankruptcy and the firm would no longer make payments or accept deposits.

Fred Destin, founder of London-based venture capital firm Stride, said a number of companies he had invested in were moving funds to Revolut and Wise.

“A lot of startups have had trouble building banking relationships… if you’re a startup, maybe you have all your money in SVP.

“The Bank of England could announce a freeze on SVB assets to prevent a run. So when you’re a startup, people have no choice but to make sure their liquidity is safe — it’s a matter of survival.

“Wise and Revolut are easy to set up and licensed institutions so you can shove a reasonable amount of money in.”

Seb Wallace, a venture capital investor at Triple Point, said: “The standard procedure with venture back companies would be to open an account with one of Starling, Revolut, Monzo and others [and] Most startups have a Wise account.

“But this [collapse] has adopted a prudent cash management approach and companies now clearly need to have multiple bank accounts to spread risk.”

Another Centure Capital partner, who wished to remain anonymous, said tech companies are also funneling money into TreasurySpring, a London-based cash management fintech, to diversify their cash management.

A Wise spokesman said they were unable to comment on the activities of tech companies. TreasurySpring did not respond to calls.

The UK arm of SVB became a fully-fledged subsidiary in September last year. The company told UK customers, partners and outside stakeholders yesterday that it has a financial position as a standalone independent banking institution with UK regulators to give customers reassurance.

However, the bank has since confirmed that it has gone bankrupt. A statement on the SVB website reads: “We announce that following discussions with the Prudential Regulatory Authority there is an intention to place Silicon Valley Bank UK Limited in bankruptcy from Sunday evening barring an intervening event.”

This story has been updated to reflect the Bank of England’s announcement that SVB UK has gone bankrupt.