A new clearing bank which launched just two years ago has confirmed it has submitted a bid to salvage the British arm of Silicon Valley Bank (SVB).

As first reported by Sky News on Saturday, The Bank of London (TBOL), which recently raised funds at a valuation of over $1bn, will lead a consortium bidding for SVB UK.

Anthony Watson, Group Chief Executive and Founder of TBOL said: "Silicon Valley Bank cannot be allowed to fail given the vital community it serves.

"This is a unique opportunity to ensure the UK has a more diversified banking sector, whilst allowing continuity of service to SVB's UK client base. It would be deeply disappointing for this moment to lead to further consolidation of power among big banks."

TBOL's new finance chief, Gavin Hewitt, was previously at SVB UK, which could offer an advantage in any attempt to acquire the business rapidly.

The bank is chaired by Harvey Schwartz, the new chief executive of Carlyle Group, the giant American private equity firm, and City insiders speculated that Carlyle could also become involved in an offer.

It will likely face competition from rival bids by Oaknorth Bank and ADQ, an Abu Dhabi state-backed investment vehicle.

Oaknorth is a business lender founded by a prominent former Conservative Party donor, Rishi Khosla, and was valued at nearly $3bn in a funding round in 2021.

City sources told Sky News that a formal offer would be subject to due diligence potentially lasting for several days, but that Oaknorth hoped to secure regulatory approval for its offer as early as Sunday evening.

The implosion of SVB's US-listed parent company, which has been taken into government control, represents one of the biggest banking collapses since the financial crisis of 2008.

UK depositors stand to receive up to £85,000 as part of the resolution of the British arm of SVB, sparking fears about the fate of substantial amounts of funding in the start-up community.

On Saturday, dozens of early-stage companies wrote to Jeremy Hunt, the chancellor, to warn of "an existential threat to the UK tech sector".

In a draft letter seen by Sky News, founders including those from Adzuna, Signal AI, JustPark and Thriva called on Mr Hunt to intervene.

"The majority of the most exciting and dynamic tech businesses bank with SVB and have no or limited diversity in where their deposits are held," the draft letter said.

"This weekend the majority of us as tech founders are running numbers to see if we are potentially technically insolvent.

"The impact of this is far greater than our individual businesses.

"The Bank of England's assessment that SVB going into administration would have limited impact on the UK economy displays a dangerous lack of understanding of the sector and the role it plays in the wider economy, both today and in the future."

The founders warned Mr Hunt, who will deliver his Budget statement on Wednesday, that the collapse of SVB UK would "cripple the sector and set the ecosystem back 20 years".

"Many businesses will be sent into involuntary liquidation overnight," they wrote.

"Many other businesses, both in the tech sector and the wider economy - the customers and suppliers of these businesses - will be negatively impacted by these businesses going bankrupt."

Mr Hunt and Treasury officials were being kept informed during the weekend about the preparations for SVB UK's resolution.

Interpath Advisory is being lined up to handle the insolvency process in the UK.

A Treasury spokesperson said: "We are working with the Bank of England to ensure that Silicon Valley Bank UK's failure is managed smoothly, and that any disruption is minimised."