Silicon Valley Bank’s sudden collapse has put more than a quarter of Roku’s cash at risk. The streaming company had $487 million, or 26 percent of its cash, in Silicon Valley Bank, the company said in an SEC filing on Friday.
The future of those funds is now uncertain as federal regulators have taken over the financial institution amid the second largest banking collapse in US history. “The company’s deposits with SVB are largely uninsured,” Roku wrote in its application. “At present, the Company does not know to what extent the Company will be able to recover its cash on deposit with SVB.”
In a statement Friday, the Federal Deposit Insurance Corporation (FDIC) said it will pay “uninsured depositors an advance dividend within the next week” and that “uninsured depositors will receive a payee certificate for the remaining amount of their uninsured funds.” But there is still much 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.
But Roku’s situation, at least for now, is much 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 several other banks. “As stated in our 8-K, we expect that Roku’s ability to operate and fulfill its contractual obligations will not be affected, and we continue to have access to $1.4 billion in cash and liquid equivalents, which is spread across multiple, large financial institutions,” a Roku spokesperson said in a statement to Engadget.
While previously a little-known institution, Silicon Valley Bank was known for its close relationships with startup founders, who made up a large portion of its clientele. But as Bloomberg’s Matt Levine explains that the bank’s reliance on fixed-income assets also made it uniquely vulnerable to the conditions that ultimately led to a run on the bank Thursday after prominent venture capitalists urged the founders to move their money out of the institution.
Roku isn’t the only major public tech company now facing losses as a result of the bank’s collapse. Roblox had $3 billion, about 5 percent of its cash, in Silicon Valley Bank, the company told the SEC. “Regardless of the final outcome and timing, this situation will have no impact on the company’s day-to-day operations,” it wrote in a filing. Video service Vimeo also revealed it had “less than $250,000” with the bank.
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