top of page
  • Writer's pictureTyler Swabey

What you need to know: Impact of the SVB Closure on the Canadian tech ecosystem

Image generated with text prompts on MidJourney... cool right?

Hey Artemis, what’s with the article on SVB? Aren’t there dozens of these posted every day talking about the same things? (...the author asks himself).

We’ve read through all the latest news on the SVB closure to bring you the Canadian context, highlighting the known and potential implications on our tech ecosystem and beyond.

Immediate Acute Impacts on Canadian Tech Companies

While the SVB collapse is expected to have a low impact on the majority of Canadian companies, it does introduce some immediate challenges for a select group of startups. As the Council of Canadian Innovators (CCI) noted, SVB plays a different role in Canada, providing only venture debt locally without a banking license. This means that Canadian-domiciled companies are less likely to have their funds directly with the bank. According to CCI president Benjamin Bergen, most Canadian startups he spoke with fall under the $250,000 limit that the FDIC is covering as part of its takeover of SVB in the US. However, the shutdown potentially eliminates a pool of capital that Canadian startups have relied on during the downturn, as SVB Canada sources its venture debt lending capital from deposits made outside the country. The closure also affects startups that have their US banking with SVB or Canadian companies legally domiciled in the US for tax purposes and use SVB. Many Canadian startups used SVB for their US bank accounts, as the bank offered more reasonable rates and quicker assistance than Canadian banks operating in the US. In the short term, these startups will need to find alternative banking solutions and navigate the challenges brought on by the sudden loss of SVB's services. The ripple effects of the SVB collapse are being felt by startups that aren't directly affiliated with SVB, as institutions like RBCx face increased workloads from SVB loan takeovers. As a result, staff at these institutions are swamped with handling the fallout from the SVB collapse, leading to postponed meetings and extended timelines for new loans and funding arrangements. This indirect impact on startups underscores the broader implications of the SVB closure, which extends beyond the immediate disruption of banking services to affect the Canadian tech ecosystem as a whole. These startups, too, must adapt to the changing landscape and find ways to secure funding amid the ongoing turbulence. 👉 Implications for Hiring and Tech Talent: The immediate challenges faced by startups that relied on SVB for their banking needs could lead to short-term uncertainty in the tech job market. Companies may have to delay hiring decisions or, in some cases, reconsider their expansion plans. For tech talent, this could mean a temporary slowdown in job opportunities or increased competition for available positions. However, it's worth noting that during the 2008 financial crisis, the tech industry proved to be more resilient than other sectors, and many startups emerged stronger and more agile after the initial turbulence subsided. Therefore, it's possible that the tech sector will rebound in a similar manner following the SVB closure.

Banks Eyeing the Gap Left by SVB

Tech Industry's Response

Chilling Effect on Investments

Impact on Mortgage Rates & Wider Economic Implications

CDIC working towards further stabilizing business banking system in Canada

Key takeaways for hiring and tech talent

The SVB closure and subsequent investor hesitancy could have significant short-term implications for innovation and talent in the Canadian tech industry, a sector already grappling with the need for increased VC capital deployment. As the industry faces uncertainty, the talent market is expected to experience a shift, marked by intensified competition for available jobs and a heightened reliance on startups to secure funding in order to retain and attract top talent.

This challenging environment may prompt job-seekers to pursue more stable opportunities in established tech companies or even consider pivoting to other industries altogether. The decreased availability of funding may also compel startups to reevaluate their hiring strategies, focusing on critical roles while deprioritizing others, which could, in turn, impact overall job growth within the Canadian tech ecosystem.

Furthermore, the decline in available funding may have a dampening effect on innovation, as startups may be forced to scale back their ambitions and focus on short-term survival rather than long-term growth and disruptive advancements. This could result in a slower pace of technological breakthroughs, potentially affecting Canada's global competitiveness in the tech sector. Ultimately, the SVB closure serves as a reminder of the importance of a stable and diverse financial landscape in supporting a thriving tech industry and fostering innovation.

The Canadian tech ecosystem is at a critical juncture, and fostering a supportive environment for growth and innovation will be essential to ensuring its continued success. By leveraging the strengths of local financial institutions, encouraging government support, and maintaining a proactive stance within the tech industry, Canada has the potential to emerge from this challenge stronger and more resilient than ever.

Subscribe to our monthly Artemis Update to receive future Salary Snapshots directly to your inbox + more great content including our Industry Insights, Leaders on the Move, Humans of Tech, Dear Artemis and Tech Women on the Move series.

Artemis Canada is a boutique executive search firm specializing in placing top talent in the tech sector across Canada, the United States, and Europe. Our team of experienced recruiters has a proven track record of finding exceptional candidates for a variety of roles, from C-suite positions to high-demand individual contributors. For more information on our services, please visit our website at


Commenting has been turned off.
bottom of page