Roku has been caught in the Silicon Valley Bank collapse, where it has kept 26% of its cash. The streaming company said Friday that it had $487 million stashed in a lender that was shut down on by regulators.
The failure of Silicon Valley Bank exposed several tech companies to risk of losing their funds parked in the bank. In its disclosure to the US Securities and Exchange Commission (SEC), Roku said the $487 million held at SVB represents approximately 26% of the $1.9 billion in total cash and cash equivalents it has as of Friday.
Roku also said that most of its funds with the SVB are not insured, significantly minimizing its chances of recovering them. The Federal Deposit Insurance Corporation (FDIC) had said in a statement that when the bank opens on Monday, March 13, all insured depositors will have access to their insured deposits.
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“At this time, the Company does not know to what extent the Company will be able to recover its cash on deposit at SVB,” Roku said in the filing. It added that its “existing cash and 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.”
SVB’s shutdown marks the largest bank failure in the US since the 2008 recession. Roku said in the filing that its remaining $1.4 billion in cash and cash equivalents have been distributed across “multiple large financial institutions.”
However, the company told Insider via email that the trapped fund will not impact its operation. “As stated in our 8-K, we expect 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 distributed across multiple, large financial institutions,” Roku’s spokesperson said.
SVB was shut down on Friday by the FDIC. The regulator then transferred the lender’s assets to a newly created bank, the Deposit Insurance National Bank of Santa Clara. The bank’s collapse became inevitable after it announced Wednesday it was trying to raise more capital, after selling part of its portfolio at a $1.8 billion loss.
The collapse of the bank, which lends heavily to venture-backed tech startups, has thrown the US banking industry into disarray – with many VC firms seeking secure financial institutions to lodge their money.