NEW YORK (Reuters) - HSBC (LON:HSBA) is planning to recruit about 50 more bankers in its U.S. commercial bank to lend to startup companies, mainly in the technology and healthcare sectors, according to a senior executive.
The London-headquartered bank hired about 40 people from Silicon Valley Bank after the latter lender failed a year ago. The innovation banking business at HSBC now stands at about 60 employees and is focused on serving early- and mid-stage companies.
"There's this void in the market and we're jumping into it," Wyatt Crowell, head of U.S. commercial banking at HSBC, told Reuters in an interview. "It's gone way better than I thought it was going to go, both in terms of the volume of deals and our win rate on the deals."
Startup companies typically struggle to get financing from major banks until they grow larger and become more established. HSBC and JPMorgan (NYSE:JPM) are among the lenders that are staffing up to serve startups as a way to win business in the longer term, including initial public offerings, overseas expansion, deals and wealth management.
HSBC has signed up about 250 companies as clients for the venture lending business, closed 35 lending deals and signed another 30 term sheets with clients for an average deal size of $15 million, Crowell said.
"I believe we've got traction in the market and that we're kind of punching above our weight relative to the scale of this team," he said. "And that plus our desires to take this global is what is driving the next wave of investment."
(This story has been refiled to correct the title of the executive to 'head of U.S. commercial banking' at HSBC, in paragraph 3)