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London-based HSBC has been catering to late-stage and mature firms since 2019.
Debt has become an increasingly popular option for startups looking for cash in a tough financing market. Last year, several late-stage startups suffered from a drop in valuations and a risk-off sentiment amid higher borrowing costs.
HSBC’s innovation banking unit, launched in June, consists of the UK arm of Silicon Valley Bank, and other newly formed teams in the United States, Israel and Hong Kong.
HSBC hired 42 bankers from Silicon Valley Bank (SVB), which collapsed in March.
HSBC is stepping up in the market when venture capital activity has slowed due to global market uncertainty in the wake of the Federal Reserve-led monetary tightening and stress in the banking sector.
In the first quarter of 2023, global venture capital investment was well under $60 billion, down from a peak of over $200 billion in the first quarter of 2022, a KPMG report said.
“We’ve been working to mobilize the broader HSBC innovation banking platform around to really be able to support companies from Series A, all the way through their journey,” said David Sabow, head of technology and healthcare at the bank’s U.S. innovation banking unit.
Series A financing is considered the first major round of external funding startups can raise.
“We’re helping with the operating business, the international expansion, the financing needs, and even leveraging the broader parts of the HSBC ecosystem to connect corporates with their early stage potential targets,” Sabow, a former SVB executive, said.
