Get all your news in one place.
100’s of premium titles.
One app.
Start reading
The Street
The Street
Business
Ellen Chang

SVB Collapse: Vox Media, Etsy Hit by Bank Shutdown

Countless companies and investors have disclosed that they had accounts at Silicon Valley Bank, the failed financial institution that was shuttered by a regulator.

Legendary investor and entrepreneur Mark Cuban says he has an exposure between $8 million and $10 million to the California bank that was closed after a massive run on the bank.

DON'T MISS: SVB Collapse: Small Businesses Caught Up in Bank Closure

"I'm only exposed to maybe $8 to $10 million," the Shark Tank star said during a Twitter Spaces on March 11. "CostsPlus Drugs.com deals with SVB. So we had, I think, $3.1 million there."

CostPlus Drugs.com is an online pharmacy that the billionaire co-founded in January 2022 to disrupt big pharma. The platform is the only company that he has founded or invested in that bears his name. The company's official name is Mark Cuban CostPlus Drug Co.

Numerous non-tech companies were also affected when the FDIC took over Silicon Valley Bank on March 10 after a run on its deposits after losing $1.8 billion on bond investments and failing to attract new capital to shore up its liquidity.

Etsy Suspends Deposits

Vox Media, which publishes The Verge, SB Nation, Recode and New York Magazine, had a "substantial concentration" of cash at Silicon Valley Bank, a source told the New York Times. 

A request for comment from Vox Media and Penske Media, its largest shareholder who owns Variety, Billboard and Rolling Stone, were not immediately returned.

Penske Media said in a statement that it was prepared if Vox Media needed capital for its operations, but did not expect there to be any problems, according to the New York Times.

Since the FDIC only insures $250,000 in deposits, customers at SVB are worried about the rest of the cash held at the bank since dozens of companies said they were not able to process their payroll on March 10 or transfer their money into another bank.

Ecommerce company Etsy (ETSY), which sells products made by its customers, sent out an email stating that scheduled deposits would be halted.

"This delay was caused by the recent developments regarding Silicon Valley Bank,” said the email to Etsy sellers read, “who Etsy uses to facilitate disbursement to some sellers. We are working with our other payment partners to issue your deposit as soon as possible.”

Streaming company Roku (ROKU) disclosed on Friday that it has 26% of its total cash and cash equivalents at Silicon Valley Bank, which was shut down by the FDIC.

Roku said it had $487 million of cash out of a total of s $1.9 billion in uninsured deposits at SVB which was placed into federal receivership on Friday, according to a SEC filing.

The company said that since it has another $1.4 billion in cash reserves "across multiple large financial institutions," Roku's "existing 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."

Crypto Firm Circle Has $3.3 Billion Locked

Crypto firm Circle, which is the issuer of cryptocurrency USDC, had $3.3 billion in deposits in the failed bank while bankrupt crypto lender BlockFi had left $227 million via a money market mutual fund, the U.S. Trustee wrote in a court filing on March 10..

Space company Rocket Lab USA (RKLB) said in a SEC filing that it had $38 million in cash or 7.9% of its cash as of Dec. 31 with SVB. The company made no other comments in the filing and did not address where the remainder of its cash was being held.

Roblox (RBLX), a gaming platform company, said 5% of its $3 billion in cash was at the failed bank, according to a filing.

Video platform company Vimeo (VMEO) said its account balance was under the $250,000 threshold.

"Therefore, the company believes it does not have exposure to any liquidity concern at SVB," the company said in a filing. "The company has a well structured and diverse set of banking partners with no bank holding over 25% of its total cash."

Sports streaming company Fubo (FUBO) said it "does not hold any deposits at SVB or have any other direct investments at SVB."

A Boston-based middle-market real estate and forestry management company, LandVest, is one of the thousands of non-tech businesses whose accounts were impacted by the failure of Silicon Valley Bank.

While SVB was well known among venture capitalists and the tech companies they funded, the bank had also acquired Boston Private Bank & Trust Company in 2021 whose clients ranged from small to medium-sized companies and non-profit organizations in various industries.

Call for Help

For the past 40 years, Landvest banked with Boston Private and stayed with the bank after SVB acquired it, Joseph Taggart, president of LandVest told TheStreet. Landvest's office was next door to Boston Private's headquarters.

Taggart said he was able to transfer some of the company's cash from SVB to one of its existing bank accounts on March 9. But the company did not transfer all of its cash to another bank because they were planning to do payroll on March 10.

"There were a lot of accounts that we had to leave active because we are transacting business all the time for vendors or payroll," he said. "We had to sit and cross our fingers and see if that transaction would go through."

Other companies were not so fortunate and their business was impacted by the closure of SVB.

Parker Conrad, CEO at Rippling, a payroll processing company, said in a tweet they were not able to service payroll for all their clients on March 10.

Elizabeth Yin, co-founder of Hustle Fund, a VC fund that invests in pre-seed software startups, said a number of the founders were not able to make payroll on March 10 either. 

"A # of my founders whose wires were blocked & have more than $250k in their svb accts are worried about making payroll today, next wk, & beyond," she tweeted. "A lot of them are willing to take $0 salary personally but it’s the employees & contractors who will be disproportionately affected."

New York toy company Camp took a creative and unusual route to generate more sales since the company's CEO Ben Kaufman sent out an email to its customers seeking help. He made light of a serious situation and told customers to use the promo code "BANKRUN."

The company said in an email that most of its cash was held at SVB and that revenue from purchases would be deposited at Chase.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.