The sudden collapse of Silicon Valley Bank has put more than a quarter of Roku’s cash at risk. The streaming company had $487 million, representing 26 percent of its cash, in Silicon Valley Bank, the company disclosed in an SEC filing Friday.
The future of those funds is now uncertain as federal regulators have taken over the financial institution amid the second-largest bank collapse in United States history. “The Company’s deposits with SVB are largely uninsured,” Roku wrote in its filing. “At this time, the Company does not know to what extent the Company will be able to recover its cash on deposit at SVB.”
In a statement on Friday, the Federal Deposit Insurance Corporation (FDIC) said that it will pay “uninsured depositors an advance dividend within the next week” and that “uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds.” But there’s still a lot of uncertainty about how long that process will take to play out, and how much of their uninsured funds companies will ultimately be able to recover.
However, Roku’s situation is, at least for now, a lot less dire than many of the smaller startups that relied on Silicon Valley Bank, some of which are now unable to pay their bills or their employees.
In its SEC filing, the company noted that it has more than a billion dollars in cash at multiple other banks. “As stated in our 8-K, we expect that Roku’s ability to operate and meet its contractual obligations will not be impacted and we continue to have access to $1.4 billion in cash and cash equivalents which are distributed across multiple, large financial institutions,” a Roku spokesperson said in a statement to Engadget.
While Silicon Valley Bank was previously a little-known institution, it was known for its close relationships with startup founders, who made up much of its clientele. But, as Bloomberg’s Matt Levine explains, the bank’s reliance on fixed-rate assets, also made it uniquely exposed to the conditions that ultimately led to a run on the bank Thursday after prominent venture capitalists urged founders to move their money out of the institution.
Roku is not the only major public tech company now facing losses as a result of the bank’s collapse. Roblox had about 5 percent of its $3 billion in cash, at Silicon Valley Bank, the company told the SEC. “Regardless of the ultimate outcome and the timing, this situation will have no impact on the day to day operations of the Company,” it wrote in a filing. Video service Vimeo also disclosed that it had “less than $250,000” with the bank.
Updated to clarify that Roblox had 5 percent of its $3 billion in cash balances at SVB.