Mar 10, 2024 - Economy

SVB's collapse was a boon for these new kids on the block

Illustration of a pile of money in front of abstract shapes.

Illustration: Shoshana Gordon/Axios

Silicon Valley Bank says it's still serving 81% of its old customers, but the events a year ago undoubtedly resulted in client defections that benefited the competition.

State of play: Many customers switched to other established banks, and a number of businesses shifted to startup-focused neo-banks. Here's how two of them fared.

Mercury: In the five days following SVB's collapse, more than 8,700 new customers flocked to Mercury with more than $2 billion in deposits.

  • The firm debuted its Vault product, which includes up to $5 million in FDIC insurance through its partner banks and their sweep networks (deposits are spread across many banks).
  • It also enables customers with more than $5 million to move additional funds into lower-risk, highly liquid mutual funds predominantly composed of short-term T-bills.

Brex: It took in 4,000 customers and $2 billion in deposits from March 9–16, 2023.

  • Deposits increased 50%+ essentially overnight as a result of SVB's troubles.
  • More than 90% of those that signed up during the week of the SVB collapse are still active Brex customers.
  • More than one third of Brex customers now use its cash management product, up from fewer than 25% before.
  • Today, Brex manages about $7 billion in customer deposits, up from about $3 billion before the events.
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