CPG Startups Hopeful After FDIC Moves to Protect SVB Depositors

Martín Caballero
SVB

Venture backed CPG is breathing a sigh of relief for the moment after the federal government stepped in to fully protect all depositors at Silicon Valley Bank after its collapse last week.

In a joint statement released this morning, Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg announced that all depositors at the failed bank will have access to all of their money starting today. Shareholders and certain unsecured debt holders are not protected.

The news has calmed nerves amongst the many CPG companies and entrepreneurs with money tied up in the Santa Clara, California-based Silicon Valley Bank, which became the second-largest failed bank in U.S. history, with $209 billion in total assets at the end of last year, according to the FDIC. A favorite partner for tech startups, the bank provided financing for nearly half of U.S. venture-backed technology and health care companies.

On Sunday, Tea Drops, which markets dissolvable tablets of tea, posted on Instagram labeled as “an SOS” that noted “ALL of its capital was in SVB and is currently frozen.” On Monday morning, founder and CEO Sashee Chandran followed up with a second post thanking the brand’s community of backers for their support.

Another SVB depositor, Asian food maker Omsom, similarly noted on Monday morning: “We won’t breathe easy until we have access to our funds, but this is DEFINITELY a win.”

Alluding to reforms enacted during the last financial crisis in 2008, the statement voiced confidence that the U.S. banking system remains “resilient and on a solid foundation.”

“Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.”