We're not in a tech bubble - we're in a 'new Renaissance' according to a top tech banker


The three-metre high painting

REUTERS/Paul Hanna

"The Disrobing of Christ", by Spanish Renaissance painter El Greco.

There's been a lot of talk recently about whether we're in a tech bubble like the dotcom boom that led to the crash in 2000.

Investors and entrepreneurs can't seem to agree whether valuing businesses like Uber at $41 billion and Airbnb at $24 billion is insanity that will come back to haunt people or the "new normal."

Gerald Brady, head of relationship banking at Silicon Valley Bank in the UK, is in the latter camp.

He told Business Insider: "We've had a lot of people ask us, are we in a bubble? We don't think that."

"You have to unpick the question - is there a valuation bubble verses is there a technology bubble? On the tech side, I don't think we're in a bubble at all. We're seeing a digital transformation in all industries. It's almost like a new Renaissance."

Europe's Renaissance period between the 14th and 17th century saw huge upheavals in arts, science, religion and music, thanks to the invention of the printing press early in the period.

Brady says of present day: "You're seeing industries you'd never expected to be disrupted facing change. In America last year there was as much invested in agricultural tech as fintech. I think we'll look back in back in 20 years and think this was an incredible age of transformation."

Brady's point is that unlike the dotcom bubble where businesses were seen as revolutionary just because they were online, today's technology companies are actually changing industries - reinventing business models, marketplaces and distribution methods.

That means that even though valuations are sky high, the businesses have the potential to come good on them.

Silicon Valley Bank deals with 65% of venture banked businesses in the US, offering deposits and loans to tech businesses, so it has a good view on what's going on in the industry. SVB's $40 billion balance sheet has backed Scribd, Tapad, Boingo, Hootsuite, and Square, among dozens of others. Brady himself has worked in technology investment for over 20 years.

Despite Brady's optimism about the types of companies being created, he does admit that some of the valuations right now do look a little nuts.

He says: "We're not in bubble territory, but valuations are definitely racy. Are we likely to see a correction in some of the valuations in the states? Probably. Does that mean we're heading for the next dotcom crash? Absolutely not."

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