The Collapse of Silicon Valley Bank

The collapse of Silicon Valley Bank has sent shockwaves through the tech industry, with a range of startups and larger firms left reeling in its wake. Publicly traded companies like Roku, Roblox, and Quotient have been particularly affected, with SEC filings revealing that they had significant sums of money held at SVB.

Roku, for example, had around $487 million held at SVB, representing around 26% of its cash and cash equivalents as of March 10, 2023. While the company has stated that it believes its existing cash balance and cash flow from operations will be sufficient to meet its working capital, capital expenditures, and material cash requirements for the next twelve months and beyond, the potential loss of such a significant amount of money is undoubtedly a concern for the streaming platform.

Similarly, gaming platform Roblox has said that approximately 5% of its $3 billion cash and securities balance was held at SVB as of February 28, 2023. However, the company has sought to reassure investors that "this situation will have no impact on the day-to-day operations of the Company."

Quotient, an omnichannel digital marketing firm and Coupons.com owner, has also disclosed a smaller impact, noting that it held $400,000 at Silicon Valley Bank UK Limited, a UK-based subsidiary of SVB.

The impact of the collapse of SVB goes beyond just these firms, however. Rocket Lab USA, a space company, has revealed that it had $38 million in cash, or 7.9% of its total cash as of December 31, 2022, with SVB. Meanwhile, Vimeo has said that it holds accounts at SVB with a total balance of less than $250,000, which means it's insured by the FDIC. The company has reassured investors that it does not have exposure to any liquidity concern at SVB and has a well-structured and diverse set of banking partners.

Other companies, like SoFi and fuboTV, have also sought to reassure investors that they were not exposed to the collapse of SVB. SoFi announced in a tweet and in a filing that it had no assets with SVB and that its only exposure was a "very small lending facility" that was provided to the company for less than $40 million, which was "unaffected by the FDIC's receivership of Silicon Valley Bank."

The collapse of Silicon Valley Bank highlights the close connections between the bank and the larger tech industry, and the potential ramifications its closure could have on brand-name firms. Regulators closed down SVB on Friday, and it is set to re-open on Monday with the FDIC in charge. Deposits are insured up to $250,000 per depositor, and the bank has assured insured depositors that they will have full access to insured deposits no later than Monday morning.

While the fallout from the collapse of SVB is undoubtedly a concern for the tech industry, companies like Roku and Roblox are optimistic about their ability to weather the storm. Both firms have recently reported strong earnings and have emphasized their ability to meet their cash requirements from known contractual obligations for the next twelve months and beyond. However, the full impact of the collapse of Silicon Valley Bank on the tech industry remains to be seen.