Billions in Silicon Valley Bank funds were frozen or potentially lost as the government moved to take over the institution, which was a vital cog in the tech industry’s financial system.
The sudden collapse of one of the industry’s key institutions is stoking fears that the sector’s economic situation may be worse than suspected and sending tech leaders scrambling to deal with the aftermath of losing a key part of the financial plumbing the industry relies on.
The bank required some clients to work exclusively with it to access loans, further centralizing its role within the tech ecosystem. One founder who spoke on the condition of anonymity to preserve his relationship with the bank said he had previously spread his money across multiple banks until a deal with Silicon Valley Bank forced his company to put all its cash there.reverberated around Wall Street and Washington on Friday. Treasury Secretary Janet L.
Roblox told investors that about $150 million of its $3 billion in cash was deposited at Silicon Valley Bank. Roku said $487 million of its $1.9 billion of cash was held by the bank. Medical equipment maker iRhythm Technologies said in a filing that $54.5 million of its $213 million in cash and short-term investments was there.Other companies said they faced serious consequences, without disclosing details.
Parker Conrad, CEO of the payroll company Rippling, tweeted Friday that the company was switching its processing bank to JPMorgan Chase and would get money to employees by Monday at the latest. He apologized to employees who didn’t get paid on time.“You rely on us, and we didn’t deliver. Although payroll is in flight, I know delays of any length have a real impact, particularly for anyone living paycheck to paycheck,” he posted.
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