Hong Kong/London(CNN) HSBC has scooped up the UK arm of failed Silicon Valley Bank, securing the future of thousands of British tech firms that hold money at the lender.

Had a buyer not been found, SVB UK would have been placed into insolvency by the Bank of England following the stunning collapse of its parent in the United States.

In a statement, the central bank said it “can confirm that all depositors’ money with SVB UK is safe and secure as a result of this transaction.”

HSBC, Europe’s biggest bank, announced the £1 ($1.2) deal early Monday morning, saying it would be effective “immediately.”

The acquisition should “end the nightmare thousands of tech firms had been experiencing over the past few days,” Susannah Streeter, head of money and markets at investing platform Hargreaves Lansdown, said in a statement.

SVB UK is a major bank partner for Britain’s tech sector, and the failure of its parent sent tech executives scrambling to work out how to get their cash out to pay staff and cover operating expenses.

The HSBC rescue is “fantastic news” for the UK startup ecosystem, said Piotr Pisarz, the CEO of Uncapped, a financial tech startup that lends to other startups. “I think we can all relax a bit today,” he told CNN.

Uncapped had launched an emergency funding program Saturday to help companies meet payroll and other obligations. It had received “hundreds” of applications from UK and US firms by Monday, according to Pisarz, who said it remained ready to support firms affected by the SVB collapse. Uncapped is also offering longer-term bridge loans to help with working capital.

Pisarz said startup companies would likely look to diversify their banking relationships because of this event. It was an “unhealthy situation” to have around half of Britain’s startup ecosystem banking with a single institution, he added.

In a statement, HSBC CEO Noel Quinn said the acquisition meant that “SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC.”

“This acquisition makes excellent strategic sense for our business in the UK,” he said. “It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life science sectors, in the UK and internationally.”

HSBC’s London-listed shares fell after market open and were 2.9% lower in morning trading. The Stoxx Europe 600 banking index also took a knock, trading 4% down.

As of last Friday, SVB UK had loans of approximately £5.5 billion ($6.7 billion) and deposits of around £6.7 billion ($8.1 billion), according to the HSBC statement. It also logged a pretax profit of £88 million ($106.5 million) in its last fiscal year ended December.

SVB, a lender best known for providing financing to startups, had faced liquidity concerns in the United States, triggering a huge bank run last week. That ultimately led to its collapse, the second-biggest of a financial institution in US history, on Friday.

US financial regulators reacted swiftly to concerns of contagion over the weekend, announcing that customers of the failed bank would get access to all their money starting Monday.

Authorities have also guaranteed deposits for customers of Signature Bank, a regional US lender shut down by regulators because it had faced financial trouble in recent days.

— Hanna Ziady contributed reporting.