Failed Silicon Valley Bank, which was shut down by Federal regulators Friday after depositors scrambled to withdraw their funds, catered to envelope-pushing tech startups, internet and software companies, as well as firms in the life science and health care space, and premium wine makers.
The California bank in 2022 banked almost half of U.S. venture-backed tech and life science firms, according to a 2022 investor relations presentation. It also banked 44% of venture-backed tech and health care IPOs.
Here are some of the bank’s customers — from online gaming platforms to wineries.
New York-based swimwear company Andie Swim was among the consumer products businesses that banked with SVB.
Founder Melanie Travis told CBS News that she was concerned the bank’s collapse would cause her small, 32-person company to fail too.
“I thought, ‘Wow, maybe this is the final nail in the coffin.’ And we lived through COVID, we got through that. For this to be the end, I was just in shock,” she said.
On Friday, Travis ran to open up a new business account at JPMorgan Chase.
“We sell product on a website that consumers buy; we needed a bank where money for the product would go,” she said.
She also relied on her account with SVB to meet payroll, pay suppliers and more.
“The first thing I thought was, how are we going to pay our employees?” she said.
Her funds are safe, she said, but she cannot move them for the moment.
The fintech firm’s co-founder and CEO Jeremy Allaire tweeted Sunday that all of its assets — which are in USD Coin, a digital currency pegged to the U.S. dollar — “are safe and secure” and that the company has moved its balance from SVB to BNY Mellon.
Allaire said the company is “heartened to see the U.S. government and financial regulators take crucial steps to mitigate risks extending from the banking system.”
Founded in 2009, Cirq Estate, a family winery, employs fewer than 25 people. In 2019, SVB highlighted founder Michael Browne’s successful entrée in to the wine industry.
SVB also touted its own deep knowledge and understanding of the industry, including the capital investment that’s required to start a wine business.
Online marketplace Etsy said SVB is among the banks it does business with. As a result, a small number of its sellers saw delays in receiving payments.
“We recently experienced a delay in issuing payments to a small group of sellers related to the unexpected collapse of Silicon Valley Bank — approximately 0.5% of our active seller base had their payments delayed on Friday,” Etsy said in a statement to CBS MoneyWatch. “We are working to pay these sellers today and we’ve already started processing payments via another payment partner this morning.”
FarmboxRx, which launched in 2014, partners with health insurance plans like Medicare and Medicaid to deliver healthy food as a form of medicine to underserved communities.
The company moved its business to SVB in 2021, and by 2023 was profitable, with tens of millions of dollars in its account with the bank, CEO Ashley Tyrner told CBS News.
When the SVB closed, FarmboxRx lost access to “the eight figures” it had in its SVB account.
“Luckily FarmboxRx made the decision to diversify our banking in mid Q1, but the series of events in the last 24 hours has been nothing short of shocking,” Tyrner said.
Tyrner said it will the company’s remaining capital held by SVB to another account once it can access to its own funds.
The digital health care startup focused on the medical needs of the LBGTQ community — including providing hormone therapy for people who are transitioning — was also caught up in the SVB fallout.
“As a company with funds at Silicon Valley Bank, this situation reaffirmed how important the team and village you create around your business is,” CEO Liana Douillet Guzman said in a statement to CBS News. “My executive team and I, along with our board of directors, spent the entire weekend ensuring that we would be prepared for the SVB fallout. While I’m always grateful for my team, watching the executive with such grace and grit during this crisis was a CEOs dream and helped to ensure that we could safeguard our company and our community.”
SVB customer Rippling, an online payroll provider ranked one of the top companies of 2022 by Y Combinator, and the top fastest growing startup by the SF Business Times, struggled to provide services to its own clients upon SVB’s collapse.
Corporations that used Rippling to pay their own employees, like health care startup Flow Health, which has 1,000 employees, were affected even though they weren’t bank customers.
“Our business didn’t bank with Silicon Valley Bank, just our payroll provider did. So we were very unfortunate to be caught up in this situation,” Flow Health CEO Alex Meshkin told CBS News. “Our employees were not able to be paid on time on Friday. We have resolved the situation and by this morning everyone will be paid.”
Meshkin said his firm provides critical services for media companies, including television and film production outfits that rely on the firm daily, particularly in the COVID-19 era.
Meshkin said that Rippling came up with a solution that allowed Flow Health to pay its workers over the weekend. Rippling also delivered payroll services to Flow Health this morning through its new banking partner, JPMorgan, Meshkin said.
Online game platform Roblox said about 5% of the company’s $3 billion in cash and securities is held at Silicon Valley Bank, according to a recent SEC filing.
The company said the SVB “situation will have no impact on the day to day operations of the company,” it said in the filing, signed by chief financial officer Michael Guthrie.
Streaming platform Roku also indicated in a filing that SVB held about $487 million, or 26% of the company’s cash or cash equivalents as of March 10.
The company added that it has $1.4 billion in cash at “multiple large financial institutions.”
“At this time, the Company does not know to what extent the Company will be able to recover its cash on deposit at SVB,” read the filing, signed by CFO Steve Louden.
Louden added that he believes the company’s “cash and cash equivalents balance and cash flow from operations will be sufficient to meet its working capital, capital expenditures, and material cash requirements from known contractual obligations for the next twelve months and beyond.”
Summer Health is a text-based pediatric care provider that gives parents prescriptions and doctor referrals within 15 minutes.
CEO and co-founder Ellen DaSilva said she opened six new bank accounts to safeguard her firm after SVB’s collapse.
“As a first-time founder of an early stage company that has been operating for less than a year, I had made the decision early on to exclusively use Silicon Valley Bank,” she said in a statement to CBS News. “I learned the hard way the importance of diversifying a banking strategy and have opened six new bank accounts for my business over the weekend. Additionally, we learned the importance of thinking beyond holding cash in the bank and investing our funds so it’s not sitting in a checking account”
Digital health company Viome, which studies the causes of chronic diseases to better detect early stage cancers and more, has been an SVB client since the inception of the company seven years ago.
“All of our venture capitalist investors said SVB was the best place for us, CEO and founder Naveen Jain told CBS MoneyWatch.
At the time of its collapse, Viome had $25 million in assets with the bank, according to Jain.
As of this morning, he’s regained access to all the firm’s funds. But the bank’s collapse has caused him to question the security of the US banking system.
“We took zero risk by keeping our money in checking with a zero percent inerest rate to make sure our money was always ours,” Jain told CBS MoneyWatch. “And suddenly we woke up Friday morning and we had no money.”
He’s in the process of opening up accounts at other, bigger banks where he believes his firm’s cash will be safer.