It was a forgone conclusion that the sudden shutdown of Silicon Valley Bank (SVB) on Friday (3/10) by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation as receiver, would impact a bevy of tech startups.
It is now known than the TV streaming platform and connected TV manufacturer Roku Inc. had millions of dollars in uninsured deposits at the now-insolvent financial institution.
What does this mean for the company, known for its streaming players, audio products, and smart home products and accessories, as well as digital advertising and related services?
“The company’s deposits with SVB are largely uninsured,” Roku said in a SEC filing made late Friday.
Approximately $487 million of Roku Inc.’s cash was held at SVB. This represents approximately 26% of the company’s cash and cash equivalents balance as of March 10.
The total cash and cash equivalents at Roku total $1.9 billion, and some $1.4 billion of its cash and cash equivalents is distributed across “multiple large financial institutions.”
Thus, even with the closure of SVB, Roku continues to believe 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.
Still, the deposits at SVB are in question. “At this time, the company does not know to what extent [Roku] will be able to recover its cash on deposit at SVB.”
According to the FDIC, all insured depositors of SVB will have full access to their insured deposits no later than Monday morning, March 13. The FDIC will pay uninsured depositors an advance dividend within the next week.
Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of SVB, future dividend payments may be made to uninsured depositors.
