SVB Capital Sale Heats Up: SkyBridge Capital, Atlas, and Vector Vie for Venture Arm

Remember the tremors that shook the crypto and tech world with the collapse of Silicon Valley Bank (SVB)? Well, the aftermath is still unfolding, and the latest chapter involves SVB’s former parent company, SVB Financial Group, inching closer to selling off a prized asset: its venture capital arm, SVB Capital.

Who’s in the Running to Snag SVB Capital?

According to a recent report from The Wall Street Journal, the race to acquire SVB Capital is down to three key players:

• SkyBridge Capital: Led by Anthony Scaramucci, this firm already has a foot in the crypto world with a significant portion of its assets under management tied to digital currencies.
• Atlas Merchant Capital: Another contender with a strong financial background, looking to expand its portfolio.
• Vector Capital: A San Francisco-based firm, bringing local expertise to the table.

These three are reportedly in the final stages of bidding, vying for control of SVB’s lucrative venture capital arm. Imagine the intensity of these negotiations!

What’s the Price Tag on SVB’s Venture Empire?

Sources familiar with the matter suggest that SVB Capital could fetch between $250 million and $500 million. That’s a hefty sum, reflecting the significant portfolio and potential of this venture capital powerhouse. However, it’s crucial to remember that nothing is set in stone yet. A final sale isn’t guaranteed, and the creditor’s committee will need to give its stamp of approval. Keep your eyes peeled for court decisions in the coming weeks – that’s when we’ll likely see some movement.

Why is SVB Capital So Desirable?

Here’s the interesting part: SVB Capital managed to sidestep the Chapter 11 bankruptcy proceedings that engulfed its parent company. It’s been operating in “ordinary course,” as reported, signaling its inherent strength and value even amidst the SVB crisis.

But what exactly makes SVB Capital so attractive?

• Vast Investment Platform: SVB Capital isn’t just any VC firm; it’s a platform that invests across the spectrum. They back other major Silicon Valley venture firms, including industry giants like Sequoia and Andreessen Horowitz (a16z).
• Impressive Portfolio: As of December 2022, SVB Capital boasted a staggering $9.5 billion in assets. This was spread across 20 funds and investments in 760 companies.
• Crypto Exposure: Notably, their portfolio includes blockchain analytics service Chainalysis, demonstrating their involvement in the crypto and blockchain space.

Scaramucci’s Crypto Angle: A Key Factor?

Let’s zoom in on SkyBridge Capital for a moment. Anthony Scaramucci’s firm manages around $1.8 billion in assets, and a significant chunk – about $580 million – is invested in cryptocurrencies and digital assets. This existing crypto footprint could give SkyBridge an edge in understanding and potentially further developing SVB Capital’s crypto-related investments. Could this be a strategic move to expand their crypto holdings? It’s certainly a possibility worth considering.

SVB’s Fall: A Quick Recap

To fully grasp the significance of this sale, let’s quickly revisit the events that led to this point.

• March 10, 2023: California regulators shut down Silicon Valley Bank, sending shockwaves through the financial world.
• March 17, 2023: SVB Financial Group filed for bankruptcy, marking a dramatic downfall for a bank that was once a pillar for crypto and tech companies.
• Banking Crisis: SVB’s collapse was part of a larger banking crisis that also engulfed Signature Bank and Silvergate Bank, creating the most significant banking turmoil since the 2008 financial crisis.

Before its demise, SVB was a crucial institution for the crypto industry, providing banking services when many traditional banks were hesitant. Its failure left a void and highlighted the vulnerabilities within the crypto-friendly banking sector.

SVB Securities: Already Sold Off

Interestingly, SVB Capital isn’t the only part of the former SVB empire being sold off. Earlier this year, SVB Securities, the investment-banking arm, was acquired by its founder Jeff Leerink and senior managers for $100 million. This demonstrates a broader effort to dismantle and redistribute the pieces of the once-mighty SVB Financial Group.

What’s Next for SVB Capital and the Bidding Firms?

The upcoming weeks are crucial. We anticipate a decision from the court regarding the sale of SVB Capital. For SkyBridge Capital, Atlas Merchant Capital, and Vector Capital, winning this bid would mean acquiring a substantial portfolio and a foothold in the venture capital landscape. For the broader market, especially the tech and crypto sectors, the outcome will indicate the future direction of SVB Capital’s investments and potentially signal shifts in investor confidence.

Key Takeaways:

• SVB Capital, a significant venture capital arm of the collapsed SVB Financial Group, is nearing a sale.
• SkyBridge Capital, Atlas Merchant Capital, and Vector Capital are the top contenders in the bidding process.
• The sale price could range from $250 million to $500 million.
• SVB Capital has a robust portfolio, including investments in crypto companies like Chainalysis.
• The sale represents another step in the restructuring of the SVB Financial Group after its dramatic collapse earlier this year.

Stay tuned as this story develops. The fate of SVB Capital and the identity of its new owner will undoubtedly have ripple effects across the venture capital and tech investment landscape.