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  • Canva, Xero and Freelancer are among the local tech companies with millions in deposits at the bankrupt Silicon Valley Bank

Canva, Xero and Freelancer are among the local tech companies with millions in deposits at the bankrupt Silicon Valley Bank

Private design platform Canva is one of several Australian tech companies with money tied up in the Silicon Valley Bank (SVB), which was seized by California regulators on Friday after customers attempted to withdraw an estimated $40 billion in cash.

After an anxious weekend wondering if they would get their money back, US officials stepped in earlier today – Sunday US time – to guarantee all amounts deposited with SVB, with approximately 90% of customers having a threshold above $250,000 (A$375,000) previously guaranteed by the Federal Deposit Insurance Corporation (FDIC).

Although deposits are safe, the US Federal Reserve refused to bail out the bank. The FDIC is now The recipient of the SVB, after stepping in over the weekend and firing management. Before clients tried to withdraw more than $40 billion last week, Silicon Valley Bank had about $175 billion in deposits.

The Fed said customers will be able to withdraw all their money on Monday, March 13, amid wider concerns that SVB, the third bank to fail in a week, joins crypto-focused Silvergate and Signature Bank. The intervention of the central bank also covers signature deposits.

Several ASX-listed tech companies revealed today that they had millions of dollars in SVB accounts, alongside several privately held startups and scaleups, including Canva.

While Canva has not disclosed the level of its exposure, the company is issuing a statement saying they were disheartened by the collapse and the impact it is having on the tech ecosystem.

“We are in the fortunate position that most of our money goes outside their banking system and we have safety nets in place to ensure that our business is not compromised,” the statement said.

“More generally, we’re also very aware that not everyone is as lucky as we are and we’ll be watching over the coming days and weeks to see if there are any ways we can support the wider ecosystem.”

A spokesperson for leading venture capital firm Blackbird, which backs Canva, said it had no direct exposure but worked with affected founders over the weekend.

“SVB has been an active supporter of the Australian ecosystem for over a decade. This is a sad situation for the global startup ecosystem,” said Blackbird spokesperson.

“It is our job to support our founders with practical solutions. Since news of the situation broke on Friday, we have been working closely with affected portfolio companies to understand the magnitude of any exposures and help them find solutions. We have also set up a forum where our founders can share their thoughts and actions.”

VCs Square Peg and Airtree did not respond to Startup Daily’s request for comment.

Fintechs Sezzle and Xero, e-commerce marketplace Redbubble, Nitro Software and job marketplace Freelancer are among the ASX-listed companies now waiting to get their money back.

The American technology company Life360 (ASX: 360) has $ 6.1 million in an account next to the American$75.4 million in money market fund shares invested in short-term AAA-rated US Government Treasury and Government Agency securities, with the SVB acting as custodian of those accounts. Life360 believes that these accounts have not been commingled with SVB assets.

Hotel platform SiteMinder (ASX: SDR) had about A$10 million in cash and payments in SVB accounts as of March 12. Nitro Software (ASX:NTO) has about US$12.2 million in cash reserves at the bank and Xero (ASX:XRO) accounts for $5 million, saying it has no material impact on the company with less than 1% of the Company’s cash and cash reserves at the end of the September 2022 quarter.

Marketplace for freelance jobs Freelancer (ASX: FLN) has about $2.35 million in deposits with SVB, Redbubble (ASX RBL), A$1.7 million. BNPL Sezzle (ASX:SZL) has US$1.2 million there, while Dubber estimated his exposure at A$1.3 million.

Shreya has been with australiabusinessblog.com for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider australiabusinessblog.com, Shreya seeks to understand an audience before creating memorable, persuasive copy.

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