Life360, Sezzle, Unity, AppLovin and Wish disclose exposure to SVB in new statements
Though the Federal Reserve stated on Sunday that Silicon Valley Bank's depositors, both uninsured and insured, will be made whole, several more tech firms disclosed their exposure to SVB over the weekend. Among those, Life360, Unity, AppLovin and Sezzle put out press releases detailing their relationships with SVB noting, in a few cases, the funds they held were "not material" to their businesses or otherwise downplaying 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 it had "less than 5% of cash and cash equivalents."
The bank's failure has impacted many firms, both large and small, with earlier announcements from Roku, Roblox and others disclosing more sizable exposures. Roku, notably, held around $487 million at SVB while Roblox had 5% of its roughly $3 billion cash and securities balance at the bank.
In its Sunday evening statement, Life360 notified investors that the FDIC has now said that it will pay uninsured depositors an advance dividend, which will be "a portion of the amount of uninsured deposits they have at SVB." These depositors will be given a receivership certificate for the remaining amount of their uninsured funds, the release explained, entitling them to the remaining amount of their funds satisfied from the proceeds of the liquidation of SVB's assets.
The family communications app maker and Tile owner said as of March 10, 2023, it had $95.1 million with the bank, including $6.1 million in deposits with SVB, and $75.4 million in shares of money market mutual funds managed by Morgan Stanley, Blackrock and Western Asset, which were invested in short-term, AAA-rated U.S. Government Treasury and Government Agency securities. While SVB was the custodian of these accounts, Life360 said they weren't mingled with its assets. That means, according to the company's understanding, the FDIC should be able to liquidate the funds and disburse these amounts or otherwise make them available.
The $6.1 million, meanwhile, was distributed across several operating and collateral accounts, which left Life360 with access to approximately $0.5 million in FDIC-insured funds. That puts Life360's exposure to loss between zero (if the FDIC is able to fully pay back uninsured depositors, as stated) and $5.6 million.
The company also said most of its restricted cash, $13.3 million, was held at PNC Bank as escrow funds related to its 2021 $205 million Tile acquisition. Another $0.3 million is at the Bank of Montreal.
Even if the funds are paid back, there is still a potential impact on companies' ability to do business because of the delay, as Life360 referenced in its release.
"Management currently expects there to be material updates as to the timing of release of funds prior to the opening of U.S. public markets tomorrow (Monday U.S. time)," Life360 said in a press release issued last night. "The Company will provide the market with an update as soon as any material further information comes to hand," it read.
Later in the day on Monday, e-commerce app Wish (aka ContextLogic Inc.) also disclosed its exposure to SVB, downplaying the impact.
It said it had less than 5% of the company’s $719 million of cash, cash equivalents and marketable securities held at the institution as of Dec. 31, 2022.
"Therefore, we do not expect the SVB situation to materially impact the Company’s overall liquidity position or its day to day operations," the press release said.
Update, March 14, 11:30 AM ET - Bandwidth Inc., BigCommerce, Opendoor, and nCino file disclosures.
Later on Monday, March 13, several other tech companies filed 8-K reports with the SEC to disclose the impacts of SVB's failure on their own businesses, including Bandwidth Inc., BigCommerce, Opendoor, and nCino, among others.
Communications platform Bandwidth Inc. had approximately $100,000 of cash on deposit at SVB, which would be insured, and had a borrower-lender relationship with the bank.
E-commerce platform BigCommerce held less than 2% of its cash, cash equivalents, restricted cash, and marketable securities (or 2% of its total of $305.0 million) with Silicon Valley Bank and Silicon Valley Bank UK Limited combined.
Real estate marketplace operator Opendoor Inc. held less than 1% of its total cash, cash equivalents and restricted cash at SVB. It added that its critical business operations were not run from SVB accounts, and 98% of cash, cash equivalents and restricted cash were held in the U.S.'s four largest banks.
Provider of cloud-based banking software nCino said it had provided its SaaS services to both SVB and the other now-closed bank, Signature Bank. SVB and Signature Bank collectively contributed to less than 2% of its total revenues as of the third quarter of the fiscal year 2023, it noted.
Buy-now, pay-later fintech Sezzle also disclosed in a press release shared via email that it had total cash and cash equivalents of approximately $68.0 million as of March 10, 2023, of which only $1.2 million was held at SVB -- or less than 2.0% of the company’s cash and cash equivalent balance; $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 SVB was not a funding partner or an originating bank partner.
AppLovin and Unity Software additionally disclosed minimal exposures. The former said that, of its more than $1 billion in cash and cash equivalents, less than $2 million was at SVB as of March 10, 2023. It also had no SVB-related credit facilities.
"We expect to operate our business in the ordinary course and will continue to carefully monitor the situation," the firm said in its press release issued on Monday.
Unity didn't disclose a dollar amount like most others, instead noting it had "less than 5%" of its cash and cash equivalents with SVB, not including any FDIC-insured amounts.
"We expect minimal impact on our operations," the software company added.
Health and wellness platform Hims & Hers Health earlier disclosed it had "limited cash exposure resulting from the liquidity concerns at SVB," without sharing a dollar amount. It added that the "vast majority of the company’s cash and short-term investments are held via third-party custodians other than SVB."
Quotient (Coupons.com), Rocket Lab USA, Vimeo, SoFi and fuboTV had previously disclosed their exposures as well.