While the Federal Reserve stated on Sunday that Silicon Valley Bank’s depositors, both uninsured and insured, will be made healthy, several other tech companies disclosed their exposure to SVB over the weekend. Among them, Life360, Unity, AppLovin and Sezle issued press releases describing their relationships with SVB, noting in a few cases that the funds they held were “not material” to their businesses or otherwise downplayed the impact. Sezzle said it had $1.2 million at SVB, while Life360 said it had $95.1 million. AppLovin had less than $2 million and Unity Software disclosed that it had “less than 5% of the cash and cash equivalents”.
The bank’s bankruptcy has affected many companies both large and small, with previous announcements from Roku, Roblox and others making larger exposures public. Notably, Roku had about $487 million with SVB, while Roblox had 5% of its roughly $3 billion in cash and securities with the bank.
In its statement on Sunday evening, Life360 informed investors that the FDIC has now said it will pay uninsured depositors an advance dividend, which will be “part of the amount of uninsured deposits they have with SVB.” These depositors will receive a certificate of guardianship for the remaining amount of their uninsured funds, the release explained, entitling them to the remaining amount of their funds paid from the proceeds of the liquidation of the SVB’s assets.
As of March 10, 2023, the creator of the family communication app and owner of Tile said yes $95.1 million in the bankincluded $6.1 million in deposits with the SVB, and $75.4 million in shares of money market funds managed by Morgan Stanley, Blackrock and Western Asset, which were invested in short-dated US Government Treasury and Government Agency AAA-rated securities. While SVB was the custodian of these accounts, Life360 said they were not commingled with its assets. That means, in the Company’s understanding, that the FDIC should be able to liquidate the funds and disburse or otherwise make those amounts available.
The $6.1 million, meanwhile, was split between various operating and collateral accounts, giving Life360 access to approximately $0.5 million in FDIC-insured funds. That brings Life360’s exposure to loss between zero (if the FDIC can fully reimburse uninsured depositors, as stated) and $5.6 million.
The company also said most of its limited cash, $13.3 million, was held with PNC Bank as escrow funds in connection with the $205 million acquisition of Tile in 2021. Another $0.3 million is with the Bank of Montreal.
Even if the money is refunded, there is still a potential impact on companies’ ability to do business due to the delay, as Life360 mentioned in the release.
“Management currently expects there to be material updates on the timing of fund releases ahead of the opening of U.S. public markets tomorrow (Monday U.S. time),” Life360 said in a press release issued last night. The company will update the market as additional important information becomes available.
Buy-now, pay-later fintech Sezzle also disclosed in a press release shared via email that as of March 10, 2023 it had approximately $68.0 million in total cash and cash equivalents, of which only $1.2 million was at SVB – or less than $1.2 million. 2.0% of the company’s cash and cash equivalents; $0.25 million was insured, so less than $1.0 million was exposed to loss, it noted. The company said it had no other material accounts or lines of credit with SVB and that SVB was not a financing partner or original banking partner.
AppLovin and Unity Software also disclosed minimum exposures. The first said that of more than $1 billion in cash and cash equivalents, less than $2 million was with SVB as of March 10, 2023. It also had no SVB-related credit facilities.
“We expect to be able to operate our business as normal and will continue to closely monitor the situation,” the company said in its Monday press release.
Unity did not disclose a dollar amount like most others, but noted that it held “less than 5%” of its cash and cash equivalents with SVB, not including any FDIC-insured amounts.
“We expect minimal impact on our business,” the software company added.
Health and wellness platform Hims & Hers Health previously disclosed that it had “limited cash exposure due to the liquidity problems at SVB,” without sharing any dollar amount. It added that “the vast majority of the company’s cash and short-term investments are held through third-party custodians other than SVB.”
Quotient (Coupons.com), Rocket Lab USA, Vimeo, SoFi and fuboTV had also previously disclosed their exposure.
