Silicon Valley Bank gears up China venture

SAN JOSE – Taking its expertise with chip startups to the mainland, Silicon Valley Bank aims to be the first U.S. tech-focused bank operating in China by September when it opens the doors on a new joint venture.

SVB, which manages about $20 billion in assets, forged a 50/50 joint venture with the considerably larger Shanghai Pudong Development Bank. The partnership recently got China government approval to operate the new bank, starting a six-month clock under China law to officially start operations.

“We were surprised to get approval so fast, so now we are moving as fast as we can to get set up,” said Andrew Tsao, managing director of SVB's private equity and international businesses.

The two companies have about 60 people dedicated to the joint venture now in place, setting up the company’s computers and networks. The two did not disclose the assets they will contribute to the venture.

“It will start off modestly,” said Tsao. “Our differentiation will be in the network of venture capitalists and other companies in our ecosystem,” he said.

The bank’s move comes at a time when startups are already plentiful, at least in China’s fabless semiconductor sector, said to be home to as many as 300 of them. Observers of the sector say what it needs today is consolidation to help form companies with the scale to grow.