Mar 14, 2023 - Technology

Cybersecurity industry grapples with Silicon Valley Bank fallout

Illustration of a hand inserting a coin into a piggy bank slot in a computer

Illustration: Annelise Capossela/Axios

Major cybersecurity companies and startups appear to have contained their risk from the sudden collapse of Silicon Valley Bank over the weekend.

Driving the news: Several cybersecurity companies, including big names like CrowdStrike, relied on SVB for some of their financial needs before the bank's unexpected failure late last week — leaving leadership teams and investors in limbo until regulators stepped in Sunday night.

  • CrowdStrike said in a statement Friday that 90% of the company's funds are "held in large global institutions."
  • GroupSense CEO Minder told Axios his company was able to access its SVB funds on Monday and moved them to a larger banking institution.

What they're saying: "If the government hadn't come forward and backstopped like they did, it would have made our life pretty difficult," Minder told Axios.

The big picture: While it's unclear how many cyber companies were SVB customers, some notable names have been linked to the firm, according to BankInfoSecurity.

  • Cloud-based data analytics firm Sumo Logic had a credit line open with SVB and borrowed $24.3 million during the fiscal year that ended on Jan. 31, 2021.
  • Boston-based Rapid7 was also a longtime customer of the bank: In March 2020, Rapid7 CEO Corey Thomas was quoted in an SVB announcement celebrating the bank's new downtown Boston office.
  • Neither company responded to Axios' requests for comment.

Between the lines: Minder is now worried about the long-term impact SVB's collapse will have on available venture capital funding as limited partners potentially pull back on their investments.

  • "They're already pulling back for a number of reasons," he said. "This is going to further that."

What's next: Cybersecurity experts warn that scammers are likely to start taking advantage of the confusion over SVB's collapse in phishing and disinformation campaigns.

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