WASHINGTON — Space startups breathed a collective sigh of relief after the U.S. government moved to protect all deposits placed with the Silicon Valley Bank.
“We’d been panicking all weekend,” said Mark Boggett, CEO of U.K.-based venture capital firm Seraphim Space.
When A third of the Seraphim Space portfolio companies had funds locked in SVB accounts.
Before the U.S. government stepped in, only funds up to $250,000 were protected, via the Federal Deposit Insurance Corp.
Public and Private Reports
Launch companies Rocket Lab and Astra Space, which are not in the Seraphim Space portfolio, were among the most high-profile space firms exposed to SVB’s collapse. Because they are public companies, Rocket Lab and Astra had to report funds at risk through SVB’s collapse as material events.
Dozens of private space companies were also affected. While they also spent the weekend scrambling to understand the impact of SVB’s failure on their deposits and investments, they were not forced to disclose those concerns.
“Now nobody is going to lose any money,” Boggett said. “And as of today, everyone has got access to their bank accounts.”
SVB UK Subsidiary
Meanwhile, SVB’s subsidiary in the United Kingdom is being sold to London-headquartered bank HSBC in a deal that would safeguard deposits.
“SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC,” HSBC CEO Noel Quinn said in a statement.
SVB reported total deposits of about $175 billion at the end of December. HSBC announced March 13 that it was taking over SVB UK deposits of about 6.7 billion pounds($8.2 billion).
Boggett praised how quickly governments and financial institutions were able to step in to placate markets.
“It had to be fast because otherwise there is contagion,” he said, and “we would have been facing a 2008 financial crisis.”
“It’s a major risk that nobody had in their sights,” Boggett added.