Bankrupt SVB Financial Seeks to Rebuild Venture Capital Business

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SVB Financial Group, the bankrupt former parent of Silicon Valley Bank, is close to rebuilding a venture capital business it lost when federal regulators took over during a meltdown and transferred the bank to First-Citizens Bank & Trust, a lawyer said in court Tuesday.

The business, SVB Capital, is worth about $427 million and is a key part of SVB Financial’s remaining portfolio, according to court papers. The bankrupt holding company still owns the assets of the venture capital business, but the nine key employees that managed those investments now work for First Citizens, according to court documents.

“One of the benefits of moving the business over is we will no longer have to be paying First Citizens Bank fees and expenses for maintaining the system,” SVB Financial attorney James Bromley told the judge overseeing the company’s Chapter 11 case. After the company agreed to make some changes to the proposal, US Bankruptcy Judge Martin Glenn agreed to approve the bonus program.

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How this fintech company succeeded after SVB’s collapseThe collapse of Silicon Valley Bank had many fintech companies on edge. But one company that found success was B2B global spend platform Brex. Brex Co-Founder and Co-CEO Henrique Dubugras joins Yahoo Finance Live to discuss the success of the company after SVB’s failure and how customer banking behaviors have changed. “Brex was one of the alternatives to Silicon Valley Bank. A lot of the next generation companies who were starting out, came to Brex for their banking services,” Dubugras says. Although Brex saw a surge in demand after SVB’s collapse, the company has had “a lot of new demand… because we’ve seen a change in behaviors from customers, from wanting to have one banking partner to having multiple banking partners,” Dubugras says. “We’re seeing this, kind of, distribution of having multiple banking partners and using each of them for what’s their best,” Dubugras explains.
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