This week marks one year since many fintechs thought their world was ending.
Almost every venture-backed fintech company banked with Silicon Valley Bank and for three harrowing days last March, many wondered if all their non-FDIC-insured money sitting at Silicon Valley Bank would be safe.
Some fintechs such as Mercury not only rode out the storm but ended up benefiting from the SVB collapse. Mercury quickly stood up Mercury Vault, offering $3 million in FDIC insurance and garnered 8,700 new clients in just five days. Six months later 92% of these customers had stayed with Mercury.
MoneyLion had a deep relationship with Silicon Valley Bank and had a stressful few days where they had to stand up new bank relationships. Now, the company has updated its operations to account for a bank failure and is much more resilient today.
The demise of Silicon Valley Bank disrupted the venture debt space, but the longer lasting effect has been on fintechs now rethinking their banking relationships.
Every fintech today realizes that you cannot rely on just one bank anymore. You can’t have a single point of failure.
Many fintechs, like Mercury and MoneyLion, are stronger for it.
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