Roku had a quarter of its cash with failed Silicon Valley Bank, most of it unsecured; Streaming Giant says it’s still breaking even

The biggest bank failure since the financial crisis more than 15 years ago hit streaming giant Roku.

In an SEC filing Friday, the company said 26% of its cash is held at Silicon Valley Bank and that the funds are “largely unsecured.” SVB, the 16th largest bank in the US with more than $200 billion in assets, collapsed earlier today and was taken over by the Federal Deposit Insurance Corp. .

Roku’s filing says the FDIC notified those with insured money at the bank that they will have full access to their insured deposits until Monday morning. Meanwhile, uninsured savers will receive an “advance dividend” next week. “Uninsured depositors will receive proof of guardianship for the remaining amount of their uninsured funds,” the filing said. “As the FDIC sells SVB’s assets, future dividend payments may be made to uninsured savers.”

As of Friday, about $487 million of Roku’s total cash and cash equivalents of $1.9 billion was held by SVB, Roku said. About $1.4 billion of the company’s cash is spread across several major financial institutions.

“At this time, the company does not know to what extent the company can recover its money deposited with the SVB,” the file states. “Despite the closure of SVB, the company remains confident that its existing cash and cash equivalents and cash flows from operations will be sufficient to fund working capital, capital expenditures and material cash requirements of known contractual obligations for the next twelve months. and beyond.”

The SVB crisis comes as Roku is already climbing to the top of its financial leadership ladder. Steve Louden, who joined the company as CFO in 2015 and helped manage the IPO, announced last year that he plans to leave in 2023. 1, with Jedda and Louden working together until the latter’s departure in August.

The FDIC was created as a safety net for investors after the 1929 stock market crash and subsequent bank run that plunged the country into the Great Depression. However, FDIC insurance is limited to $250,000 per account holder, putting larger customers at risk.

Roku is far from the only tech company hit by the troubles at the bank, which has been Silicon Valley’s premier institution for tech startups for decades. A number of companies have withdrawn funds in recent days as signs of volatility have increased due to the impact of interest rate hikes by the US Federal Reserve. FuboTV is an exception in the entertainment space. The company filed an SEC filing stating that it has no money in the bank.

Rep. Eric Swallwell, a California Democrat, asked Congress on Friday to raise the FDIC cap to relieve some SVB customers. “We must ensure that all deposits exceeding the FDIC limit of $250,000 are honored,” he tweeted. “Banking is a matter of trust. If depositors lose confidence in the safety of their deposits of more than 250,000, we are in trouble.”

Jill Goldsmith contributed to this report.