These are some of the companies affected by the Silicon Valley Bank collapse
Before the sudden collapse, Silicon Valley Bank was a critical banking partner for a number of innovative technology startups, software manufacturers, biotech firms and even wineries.
The California bank in 2022 provided banking services to nearly half of US venture-backed technology and life sciences firms, according to a 2022 investor relations presentation. Here’s a representative sample of the bank’s clients, from online gaming platforms to wineries.
New York-based swimwear company Andie Swim was among the consumer product companies that served with SVB.
Founder Melanie Travis told CBS News she was worried the bank’s collapse would cause the small 32-person company to fail as well. “I thought, ‘Wow, maybe this is the final nail in the coffin.’ And we lived through COVID, we got through it. For this to be the end, I was just in shock,” she said.
On Friday, Travis ran to open a new business account at the nation’s largest bank by asset size, JPMorgan Chase.
“We sell products on a website that consumers buy. We needed a bank where the money for the product would go,” she said.
Specifically, Travis was able to tap into her account at SVB to meet the company’s payroll, pay vendors, and more.
“The first thing I thought was, how are we going to pay our employees?” she said.
Her money is safe, she said, but she can’t move it at the moment.
The fintech firm’s co-founder and CEO Jeremy Allaire tweeted on Sunday that all the assets – which are in USD Coin, a digital currency linked to the US dollar – “are safe and secure” and that the company has moved the balance from SVB to BNY Mellon.
Allaire said the company is “encouraged to see the US government and financial regulators taking decisive steps to reduce risks that extend from the banking system.”
The family winery Cirq Estate was founded in 2009 and employs fewer than 25 people. In 2019, SVB highlighted founder Michael Browne’s successful entry into the wine industry. SVB also claimed its own deep knowledge and understanding of the industry, including the capital investment 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 merchants 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 as of Friday,” Etsy said in a statement to CBS MoneyWatch . “We are working to pay these merchants today and we have already started processing payments through another payment partner this morning.”
Launched in 2014, FarmboxRx partners with health insurance plans like Medicare and Medicaid to deliver healthy food as a form of medicine to underserved communities.
The company moved operations to SVB in 2021 and turned a profit within two years, with tens of millions of dollars in the bank, CEO Ashley Tyrner told CBS News. But when California regulators seized SVB on Friday, FarmboxRx lost access to “the eight figures” it had in its SVB account.
“Fortunately, FarmboxRx made the decision to diversify our banking business in the middle of Q1, but the series of events over the past 24 hours has been nothing short of shocking,” Tyrner said.
Tyrner said it will move the company’s remaining capital held by SVB to another account once it gets access to the funds.
The digital healthcare startup focused on the medical needs of the LBGTQ community, such as providing hormone therapy for people who are transitioning, was also caught up in the SVB fallout.
“As a company with funds in Silicon Valley Bank, this situation confirmed how important the team and the village you create around your business are,” CEO Liana Douillet Guzman said in a statement to CBS News. “My management team and I, along with our board, spent the entire weekend making sure we would be prepared for the SVB fallout. While I am always grateful to my team, it was a CEO’s dream to watch the leader with such grace and grit during this crisis, and it helped ensure we could protect our company and our community.”
SVB client Rippling, an online payroll provider ranked as one of the top companies of 2022 by Y Combinator and the fastest growing startup by SF Business Times, struggled to provide services to its own clients after SVB collapsed.
Companies that used Rippling to pay their own employees, such as healthcare provider Flow Health, which has 1,000 employees, were also affected even if they were not bank customers.
“Our business doesn’t bank with Silicon Valley Bank, only our payroll provider did. So we were very unfortunate to get caught up in this situation,” Flow Health CEO Alex Meshkin told CBS News. “Our employees were unable to get paid on time on Friday. We have resolved the situation and tomorrow 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 era of COVID-19.
Meshkin said Rippling came up with a solution that allowed Flow Health to pay its workers over the weekend. Rippling also provided payroll services to Flow Health this morning through its new banking partner, JPMorgan, Meshkin said.
Online gaming platform Roblox said about 5% of the company’s $3 billion in cash and securities is held with Silicon Valley Bank, according to a recent SEC filing. The company said “the situation will not have any impact on the day-to-day operations of the company,” the filing said.
Streaming platform Roku reported in a filing that SVB had 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 with “several major financial institutions.”
“At this time, the company does not know to what extent the company will be able to recover cash on deposit with SVB,” Roku said in the filing.
CFO Steve Louden said in the filing that Roku has enough cash on hand “to meet its working capital, capital expenditures and material cash requirements from known contractual obligations for the next 12 months and beyond.”
Summer Health is a text-based pediatric care provider that provides parents with prescriptions and referrals within 15 minutes.
CEO and co-founder Ellen DaSilva said she opened six new bank accounts to protect her firm after SVB’s collapse.
“As a first-time founder of an early-stage company that has been in business 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 keeping cash in the bank and investing our funds so they don’t sitting in. a checking account”
The digital health company Viome, which studies the causes of chronic diseases to better detect early-stage cancer and more, has been an SVB client since the company’s inception 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 the collapse, Viome had $25 million in assets in the bank, according to Jain. As of this morning, he has regained access to all the company’s funds. But the collapse has prompted him to question the safety of the US banking system.
“We took zero risk by keeping our money under control at a zero percent interest rate to make sure our money was always ours,” Jain told CBS News. “And suddenly we woke up on Friday morning and we had no money.”
He is in the process of opening accounts in other, larger banks where he believes the company’s cash will be safer.