Mar 10, 2024 - Economy

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

Kia Kokalitcheva

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

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