The sudden collapse of Silicon Valley Bank put more than a quarter of Roku’s cash at risk. The streaming company had $487 million, representing 26% of its cash, in Silicon Valley Bank, the company disclosed in an SEC filing on Friday.
The future of these funds is now uncertain as federal regulators took control of the financial institution amid the second banking meltdown in US 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 with SVB.”
In a statement on Friday, the Federal Deposit Insurance Corporation (FDIC) said it will pay “uninsured depositors an early dividend within the next week” and that “uninsured depositors will receive a certificate of receivership for the remaining amount of their uninsured funds”. But there is still a lot of uncertainty about how long this process will take and how much uninsured funds companies will ultimately be able to recover.
However, Roku’s situation is, at least for now, far less dire than many small startups that relied on Silicon Valley Bank, some of which are now unable to pay their bills or pay their employees.
In its filing with the SEC, the company said it had more than $1 billion in cash at several other banks. “As set forth in our 8-K, we anticipate 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 spread across several major 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 a large portion of its customer base. But as Bloomberg’s Matt Levine explains that the bank’s reliance on fixed-rate assets also uniquely exposed it to the conditions that ultimately led to a run on the bank on Thursday after prominent venture capitalists urged founders to withdraw their money from the institution.
Roku isn’t the only major public tech company to suffer losses following the bank’s collapse. Roblox had $3 billion, or about 5% of its cash, at Silicon Valley Bank, the company told the SEC. “Regardless of the end result and timing, this situation will have no impact on the day-to-day operations of the company,” he wrote in a filing. Video service Vimeo also revealed it had “less than $250,000” with the bank.
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