For decades, Silicon Valley Bank has been a critical financing partner to the startup and venture capital ecosystem. In the past two weeks, fintech startups have stepped up and tried to fill in the void left by the recent collapse of Silicon Valley Bank.
San Francisco-based banking startup Mercury said it has added more than $2 billion in deposits and thousands of new customers. It is offering customers expanded FDIC insurance of up to $6 million via a new product in the wake of Silicon Valley Bank’s collapse. New York-based treasury management startup Meow, which helps companies invest their cash in Treasuries, has seen hundreds of millions of inbound demand and has now crossed $1 billion in assets.
San Francisco-based corporate card startup Brex, which offers a business banking account, added over 3,000 new customers and reportedly took in billions in new deposits. It also extended loans to former Silicon Valley Bank customers to help them meet payroll. Like Mercury, it also offers FDIC insurance up to $6 million. San Francisco-based Arc, which lets software companies sell their future revenue streams in exchange for upfront cash, had seen 500 startups apply for more than $150 million in payroll financing in the wake of the SVB collapse. It launched Arc Gold, automated treasury management for startups to diversify and strengthen their financial position.
New York-based banking startup Rho has also seen a surge of new customers. Its Treasury Management Account is built on a network of over 400 FDIC-insured banks, allowing customers to access up to $75 million in FDIC deposits. Payroll provider Rippling raised $500 million in emergency financing following the collapse of its primary banking partner SVB and extended $130 million of its own capital to fund customer payments to their employees.
The collapse of Silicon Valley Bank and the continued troubles at other banks has sparked discussions around banking regulations, treasury management, and monetary policies. While that happens, we should not overlook the significant role SVB played in building relationships throughout the innovation ecosystem, understanding startups, and supporting entrepreneurs. While the fintech startups have quickly adapted and helped companies, a void in the financing stack now needs to be filled.
