BuzzFeed, Roblox & Unity: Tech companies impacted by Silicon Valley Bank collapse

The swift downfall of the bank brought back memories of the financial crisis that wreaked havoc about 15 years ago. SVB is known to be fueling numerous VC-backed tech start-ups. After the crisis, global financial stocks are believed to have lost $465 billion in market value in just two days.

With its unprecedented crisis, the spotlight is now on all the tech companies that have been impacted by the bank’s free fall. Here’s a look at some of the tech companies that have been impacted by SVB’s nosedive.

Roku, Inc

The digital media player brand Roku is one of the affected tech companies. The US-based company was among the ‘most exposed firms’ with a $487 million exposure to SVB’s collapse. It represented nearly 26 per cent of the company’s $ 1.9 billion total cash and equivalents as of March 10.

Reportedly, the company’s remaining $1.4 billion is distributed across other large financial institutions. The company in its official statement said that it was unaware of to what extent it would be able to recover its cash on deposit at SVB.

It said that it continues to believe that its existing cash, cash equivalents balance, and cash flow from operations will be sufficient to meet its working capital, capital expenditures, and material cash requirements from known contractual obligations for the next twelve months and beyond.

Roblox

The gaming platform in its filing stated that around 5 per cent of its $3 billion cash and securities balance were held at SVB as of February 28. Regardless of the crisis, the company has said that the “situation will have no impact’ on its day-to-day operations. Reportedly, Roblox is among the companies that the Federal Reserve is promising to bail out.

BuzzFeed

Popular digital media company BuzzFeed Inc said that it had about $56 million in cash and cash equivalents that were held at SVB at the end of 2022. In the aftermath of the crisis, the shares of Buzzfeed went down by 8.6 per cent at $1.17 in extended trading on Monday.

Buzzfeed, which reported a 27 per cent decline in ad revenue, has been grappling with the concerns of a slowing economy. The company is reportedly expecting $61 million to $67 million in overall revenue in the first quarter. It reported a $91.6 million revenue in the first quarter of last year.

BlockFi Inc.

A day after SVB was shut down by California’s financial regulator, on March 11, Blockfi’s bankruptcy filing revealed that it had $227 million worth of uninsured funds allocated to a money market mutual fund (MMMF) that was marketed by SVB.

The lawyer representing the company has said that it was in a stable financial position with adequate cash reserves. This was despite it having more than $200 million exposure to SVB, according to a Bloomberg report.

Unity Software Inc.

One of the world’s leading platforms for real-time 3D content, Unity Software said that it held less than 5 per cent of its cash and cash equivalents at SVB.

“As Silicon Valley Bank (SVB) has been placed under receivership with the Federal Deposit Insurance Corp (FDIC), Unity is disclosing that less than 5% of our cash and cash equivalents are with SVB, not including any FDIC-insured amounts, and we expect minimal impact on our operations,” the company said in its official statement.