SVB, a prominent lender to the technology sector, boasted an extensive clientele, including the likes of Airbnb, Stripe, and Coinbase. Established in 1983, the bank held a substantial $210 billion in assets. Despite its impressive track record, SIVB faced liquidity challenges stemming from its involvement in precarious loans and investments.
On March 10th, 2023, regulators from California and the FDIC intervened, assuming control over its deposits and assets. This event marked the most substantial bank failure since 2008 and sent ripples throughout the financial markets and technology industry.
Companies affected by the SVB collapse
As of the 11th of March, 2023, several notable companies revealed their financial holdings in Silicon Valley Bank (SVB). It is important to note that the list is not exhaustive.
According to Roku Inc.’s SEC Form 8-K, as of March 10, 2023, the company had a total cash and cash equivalents balance of approximately $1.9 billion. Of this amount, approximately $487 million, or roughly 26%, was held in SVB. The remaining approximately $1.4 billion of the company’s cash and cash equivalents were spread across various other large financial institutions.
According to a recent filing with the Securities and Exchange Commission, Roblox Corporation (RBLX) currently holds a cash and securities balance of $3 billion as of February 28, 2023. Approximately 5% of this balance, equivalent to $150 million, is held at Silicon Valley Bank. Despite this development, the company reassures investors that its day-to-day operations will not be affected, regardless of the outcome and timing of the situation.
Ginkgo Bioworks Holdings, Inc (DNA) recently filed a Form 8-K with the Securities and Exchange Commission, disclosing that the cash balance of its wholly-owned subsidiary, Zymergen Inc., is held in deposit accounts at Silicon Valley Bank. This amount represents around 6% of the company’s total cash and cash equivalents as of December 31, 2022, totaling approximately $74 million. The filing further clarifies that the company does not have any other significant accounts or lines of credit with SVB.
Sangamo Therapeutics, Inc. (SGMO) has disclosed in a recent filing with the Securities and Exchange Commission that as of March 10, 2023, the company had approximately $34.4 million deposited with Silicon Valley Bank. It’s important to note that most of these deposits are uninsured.
Rocket Lab USA, Inc. (RKLB) has revealed in a recent Securities and Exchange Commission filing that the company maintains deposit accounts with Silicon Valley Bank, with a total balance of around $38 million. This amount represents roughly 7.9% of the company’s total cash and cash equivalents, as well as marketable securities as of December 31, 2022, as previously reported. The filing did not disclose whether the deposits are insured or uninsured.
In a recent filing with the Securities and Exchange Commission, LendingClub Corporation (LC) has disclosed that its relationship with Silicon Valley Bank (SVB) is confined to a sum of $21 million in funds on deposit. The filing further clarifies that this amount is considered immaterial to the company’s liquidity position and capital levels, and that it poses no significant risk to LendingClub’s ongoing business or operations.
Payoneer Global Inc. (PAYO) has disclosed in a recent filing with the Securities and Exchange Commission that, as of December 31, 2022, the company held total cash balances of around $6.4 billion. Of this amount, less than $20 million is held at Silicon Valley Bank (SVB), through a combination of cash deposits and money market funds that are purchased through SVB but managed by a third-party asset manager. The filing also indicates that the vast majority of Payoneer’s cash balances are held across more than 10 global systemically important banks.
According to a recent filing with the Securities and Exchange Commission, Compugen Ltd. (CGEN) has disclosed that its U.S. subsidiary currently holds approximately 1.3% of its cash and cash equivalents, equivalent to $1 million, with Silicon Valley Bank (SVB). The filing further clarifies that the company considers its exposure to any liquidity concern at SVB as immaterial, implying that it does not pose a significant risk to Compugen’s financial position.
QuantumScape Corporation (QS) has disclosed in a recent filing with the Securities and Exchange Commission that its exposure to Silicon Valley Bank (SVB) is very limited. According to the filing, the company has only a low single-digit percentage exposure to SVB, relative to both its total liquidity and total assets. This implies that any potential liquidity or operational concerns related to SVB are not expected to have a significant impact on QuantumScape’s financial position or operations.
Fubotv Inc. (FUBO) has disclosed in a recent filing with the Securities and Exchange Commission that it is aware of the Federal Deposit Insurance Corp. taking control of Silicon Valley Bank (SVB). However, the company has clarified that it does not hold any deposits at SVB or have any other direct investments with the bank.
Sofi Technologies Inc. (SOFI) has informed its investors through a recent filing with the Securities and Exchange Commission that it does not hold any assets with Silicon Valley Bank (SVB). However, the company has disclosed that it has a lending facility of approximately 40 million dollars, which is provided through SVB. The filing clarifies that this lending facility is unaffected by the Federal Deposit Insurance Corporation’s receivership of SVB.
In a recent Securities and Exchange Commission filing, Lemonade (LMND) has acknowledged concerns about liquidity at Silicon Valley Bank (SVB) in the media. However, the company has stated that its exposure to any such concerns at SVB is not significant, as it currently holds less than $7,000 in cash at the bank.
This amount is well below the FDIC-insured limit of $250,000. The filing further explains that Lemonade has taken steps to minimize risk by diversifying its cash and assets across various institutions.
This company also uses large financial institutions for its commercial banking services, which are currently not exposed to any liquidity risk.
What does the Silicon Valley Bank collapse mean to other companies?
The closure of Silicon Valley Bank has been a significant development for the tech industry and financial markets, given the bank’s important role as a lender to the sector. While many companies had deposits with the bank, the impact varied widely, with some holding only a small percentage of their cash at SVB, while others had millions of dollars held in deposit accounts.
Despite the severity of the situation, most companies have reported that they took measures to diversify their cash holdings across various institutions. As a result, the closure of SVB is not expected to have any impact on its ongoing business or operations. This event underscores the importance of robust risk management practices for all financial institutions, regardless of their reputation and standing in the industry.