Silicon Valley Bank (SVB): The most important facts about the bankruptcy from the point of view of robotics

Update 3/13/2013 (5:25 AM): All deposits will be refunded. Text below is then out of date.

In addition to some general information, the following also contains information related to robotics. All based on third-party sources such as Handelsblatt, Bloomberg, without insider information.

• The bank has been around for 40 years and is considered the 16th largest in the US. It was considered solid. Total assets $209 billion, roughly 10x Stadtsparkasse München.
• During financing rounds, investors apparently often demanded that the startups "park" their money with SVB. (Startup receives e.g. 10 million, the money then has to go somewhere).
• Now Silicon Valley Bank is effectively bankrupt. For the time being, only $250,000 is covered by the deposit insurance. The rest can (partly) come later.
• In the USA, 2-week salary payments are not unusual. Tomorrow Monday would be such a deadline again. I.e. many startups and also other tech companies probably can't pay salaries (but also suppliers, rents). Maybe 30-50% of deposits will be covered in the short term(link).
• The reason for the crisis was that the bank had to invest the deposits it had received. It did this in bonds. Due to the development of interest rates, these automatically lost value. Now it had to sell many bonds because "savers" (corporate customers) wanted money to finance their current business. The bonds could then only be sold at a loss.
• So there is a crisis looming, but the state is apparently only allowed to cover everything by congressional decree. This would take time and would not be easy (majority?).
• Impact on robotics: At this point, there are always reports about large US financing rounds. Once the aforementioned startups have invested their money with Silicon Valley Bank, it is blocked for the time being. Then the startups face insolvency for lack of solvency. If they receive 30 or 50% (see above), they have money, but their business plan does not work out. This is because 50% will probably not be enough until the break-even point is reached. The bonds could also be worth more. The question will therefore be how high is the effective loss and when will the money come in. A decent gap is likely to remain.
• If this were to happen, the US robotics market would be different than before. Opportunities would open up for German suppliers.
• Silicon Valley Bank was willing to take a risk. It therefore also financed RaaS (Robotic-as-a-Service). So there may be repercussions here, too, including in Germany.
• The Frankfurt-based German branch should be protected for the time being by Bafin, our supervisory authority. This means that no funds may be transferred to the USA. At least that was the case during the Italian banking crisis. HypoVereinsbank was strictly prohibited from sending funds to its parent UniCredit.
• Silicon Valley Bank also wrote extensive analyses, by the way. The one in the picture is from 2020 and can be found here.
• Conclusion: Either everything can be solved (if 30% is financed first and solutions are found - new capital rounds?), but tectonic effects cannot be ruled out. This was the headline of Bloomberg at the time of the Lehman bankruptcy and it was right.

If you want to experience a "financial crisis", here is a great documentary, especially the first 5 minutes.

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-> Go to the Cobot group on LinkedIn (link). The author is also a consultant (robotics, tech & funding).