Jamie Dimon Has a Rival in Tech: Silicon Valley Bank

Since Silicon Valley Bank became the second-biggest failure in US history a year ago, other lenders have been trying to take its place in banking the fast-moving, entrepreneurial world of startups and tech companies. JPMorgan Chase & Co. and HSBC Holdings Plc have jumped into a market focused on small companies that could become the billion-dollar businesses of tomorrow. But these two giant upstarts on the San Francisco scene face stiff competition from a familiar name — Silicon Valley Bank itself, which lives on under the ownership of First Citizens Bancshares Inc.

SVB’s goal is to dominate startup land once again. Sure, it has a trust deficit to rebuild with venture capital firms and their companies, but its well-informed local bankers who are close to their industries give it an edge.

JPMorgan and HSBC, which both picked up parts of failed banks and teams of people in California last year, may offer unquestioned safety for depositors. But it’s far from obvious that these behemoths can recreate SVB’s on-the-ground expertise and attentiveness to hundreds of founders and their venture capital backers. Plus, there’s some skepticism about their long-term commitment.

Marc Cadieux, the 32-year veteran who was SVB’s chief credit officer before its collapse and now runs the business within First Citizens, says the bank can regain its position in time. “One silver lining is how difficult it is to replicate what we do,” he told me at SVB’s new offices in downtown San Francisco last month. “Larger banks entering this market need to still build a business.”