Global banks can learn lessons from the collapse of Silicon Valley Bank and tailor their offerings to the start-up sector to ensure they leverage the opportunities it provides, said the co-founder of technology investment firm Target Global.
Lenders should consider extending more of their services to the start-up industry as it provides an opportunity to diversify portfolios, Shmuel Chafets told The National.
“It's an opportunity globally for banks to get a peek at start-up financing and to get into the start-up level,” he said.
“In the long term, it would provide more funding for the industry.
“It would be very helpful for the start-up ecosystem. There would be more competition, diversity and risk and cash management.”
California-based SVB was the go-to bank for technology entrepreneurs and start-ups. At its peak, it was the 16th-largest bank in the US and the biggest in Silicon Valley, a global centre for technology and innovation.
US regulators seized SVB and placed it on receivership after it collapsed this month. On Monday, the US Federal Deposit Insurance Corporation confirmed that North Carolina-based First Citizens Bank & Trust would acquire SVB's assets.
It became the biggest bank failure in US history after Washington Mutual's collapse in 2008, which triggered the global financial crisis.
The saga highlighted the disadvantages of a bank concentrating the majority of its portfolio on certain industries, which, in this case, were start-ups and technology companies.
It also exposed the need to boost local funding for start-ups instead of them relying on overseas lenders.
“Moving forward, a collaboration between the banking industry and the venture capital community is vital to provide facilities and support start-ups and, consequently, minimise the reliance on having to use international banks,” Philip Bahoshy, founder of data platform Magnitt, said.
Target Global, one of the biggest VC funds in Europe and Israel, which has around €3 billion ($3.25 billion) of assets under management, is expanding its presence in the UAE market with the establishment of an office in Abu Dhabi Global Market.
Mr Chafets acknowledged the strength of the UAE's start-up ecosystem and the financial sector, both of which help the company's business development portfolio.
“Local commercial banks [in the country] have a good book when it comes to start-ups,” he said.
Target Global's expansion in the Emirates has a goal of putting the UAE on its investment map and bringing the country to the attention of investors looking for high-growth opportunities, he said.
“Yes, it's about investing, but it's also about bringing and helping our companies leverage what the UAE has offer,” he said.
“We have brought a big group of [start-up] founders to Abu Dhabi and Dubai to meet … people in the FinTech world, regulators, the government and other businesses.”
He did not give a timeline for when the office would open, although he said Target Global has been “consistently expanding” its operations in the UAE over the past eight years. It invested in local start-ups including beauty company Fresha, open banking platform Tarabut Gateway and FinTech start-up Rapyd.
We have brought a big group of [start-up] founders to Abu Dhabi and Dubai to meet ... people in the FinTech world, regulators, the government and other businesses
Shmuel Chafets,
co-founder of Target Global
“The establishment of VCs in ADGM builds confidence for more asset management firms to follow suit and choose Abu Dhabi as their regional home to expand their business operations, especially with its ideal geographical location and amiable tax and legal environment,” Arvind Ramamurthy, chief market development officer of ADGM, told The National.
Aside from ADGM, the investment firm will also work closely with Hub71, Abu Dhabi's global technology and start-up ecosystem, to build on scaling its network through strategic partners.
Target Global will focus on key verticals including consumer technology, mobility, logistics, health care and FinTech, as well as robotics, Mr Chafets said.
The size of its investments in start-ups range from €1 million to €5 million for those in the seed and series A rounds, €10 million to €30 million for series B and C, and up to €150 million to €200 million for those in the late stage, he said.
He acknowledged that start-ups continue to face challenges when it comes to funding, especially when compared to bigger, more established organisations.
“Good companies get funded in any environment. That's the truth. Sometimes they'll get funded in the terms that they want, but good companies get funding almost no matter what the environment is,” Mr Chafets said.
“It's more challenging for younger entrepreneurs and companies that have more to prove.”
COMPANY%20PROFILE
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The specs
Engine: 3.5-litre twin-turbo V6
Power: 380hp at 5,800rpm
Torque: 530Nm at 1,300-4,500rpm
Transmission: Eight-speed auto
Price: From Dh299,000 ($81,415)
On sale: Now
ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
UAE currency: the story behind the money in your pockets
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
The Gentlemen
Director: Guy Ritchie
Stars: Colin Farrell, Hugh Grant
Three out of five stars
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
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SPEC%20SHEET%3A%20APPLE%20IPHONE%2014%20PRO%20MAX
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The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
CONFIRMED%20LINE-UP
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Results:
6.30pm: Maiden Dh 165,000 1,400m.
Winner: Walking Thunder, Connor Beasley (jockey), Ahmad bin Harmash (trainer).
7.05pm: Handicap (rated 72-87) Dh 165,000 1,600m.
Winner: Syncopation, George Buckell, Doug Watson.
7.40pm: Maiden Dh 165,000 1,400m.
Winner: Big Brown Bear, Pat Dobbs, Doug Watson.
8.15pm: Handicap (75-95) Dh 190,000 1,200m.
Winner: Stunned, Pat Dobbs, Doug Watson.
8.50pm: Handicap (85-105) Dh 210,000 2,000m.
Winner: New Trails, Connor Beasley, Ahmad bin Harmash.
9.25pm: Handicap (75-95) Dh 190,000 1,600m.
Winner: Pillar Of Society, Pat Dobbs, Doug Watson.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
UAE currency: the story behind the money in your pockets
Health Valley
Founded in 2002 and set up as a foundation in 2006, Health Valley has been an innovation in healthcare for more than 10 years in Nijmegen, the Netherlands.
It serves as a place where companies, businesses, universities, healthcare providers and government agencies can collaborate, offering a platform where they can connect and work together on healthcare innovation.
Its partners work on technological innovation, new forms of diagnostics and other methods to make a difference in healthcare.
Its agency consists of eight people, four innovation managers and office managers, two communication advisers and one director. It gives innovation support to businesses and other parties in its network like a broker, connecting people with the right organisation to help them further
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
THE BIO
Favourite holiday destination: Whenever I have any free time I always go back to see my family in Caltra, Galway, it’s the only place I can properly relax.
Favourite film: The Way, starring Martin Sheen. It’s about the Camino de Santiago walk from France to Spain.
Personal motto: If something’s meant for you it won’t pass you by.
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
