Britain’s technology and life sciences businesses are in grave danger following the closing of the Silicon Valley Bank. The US government shut down the California-based SVB bank on Friday, which is responsible for managing the funds of some of the most successful companies in the UK.
The FDIC, the US deposit guarantee agency, is likely to take control of the bank on Monday when it is expected to return under a new name.
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As of December 31, 2022, The Silicon Valley Bank had about $209 billion in total assets and $175.4 billion in total deposits. The FDIC provided government insurance for its deposits, subject to some relevant limits.
Notwithstanding SVB’s strong financial situation before the downfall, shareholders and depositors retaliated by withdrawing $42 billion in deposits on March 9, causing a run on the Silicon Valley Bank. SVB now has an approximate $958 million negative cash position as of the end of business on March 9.
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Here are some of the companies that have been impacted by Silicon Valley Bank’s downfall:
- Roku
- Circle
- Roblox
- BlockFi
- Compass Coffee
- Camp
- Axsome Therapeutics
- Etsy
- Rocket Lab
- Unity Software
- Shelf Engine
- Bluestone
- Carwale
- InMobi
- Loyalty Rewardz
- Paytm
- Vox Media
- Slumberkins
- Ambarella
- Oncorus
According to Chancellor Jeremy Hunt, the government will “very soon” present steps to ensure that customers of SVB can pay their employees and satisfy their cash flow obligations. He said that it will also put in place a longer-term plan to minimize or fully prevent damage to British companies.
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The bank collapsed just after huge withdrawals from its customers, primarily in the IT sector, and shortly after its most recent attempt to raise new funds failed.
SVB specialized in startup finance and had grown to become the 16th-largest US bank by assets. Its failure ranks as the second-largest US retail bank failure and the worst bank failure since Washington Mutual in 2008.
