SVB Impact: JPMorgan Chase and US Neobanks Record Largest New Account Openings by Startups

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Where are startups moving their money? The collapse of Silicon Valley Bank? Kruze Consulting, a San Francisco-based tax and accounting firm for startups, has found that JPMorgan’s Chase accounts for the largest outflow from his SVB in recent weeks. Nearly 50% of SVB-affected startups have opened accounts and transferred funds to America’s largest bank with $3.2 trillion in assets.

Meanwhile, startup-focused neobanks like Mercury and Brex were the other top beneficiaries from the SVB meltdown. Ranked 3rd in %. “The second biggest winner is Mercury. Probably solid UX, good account management and [a] According to Kruze’s findings, it is a strong startup-focused brand.

“Another big winner for new account opening is SVB Meltdown is Brex. Getting a Brex Cash account was a no-brainer during the crisis because the founder likely already had a relationship with Brex,” he explained Kruze.

Indian and US biotech start-up founders said business today“The Brex transfer to India was quick, easy and smooth. [Money was] It will be delivered to ICICI Bank within 24 hours. All online… no additional approval was required. ”

Other beneficiaries of the SVB impact on new account openings by VC-backed startups include First Republic (6%), Bank of America (3%), Morgan Stanley (2%), Wells Fargo (2%) included. ), and others (8%), according to Kruze’s findings.

“As things began to deteriorate and the stock prices of local banks began to fall, it became clear that the only ones who were completely safe were those too big to fail. It’s a dilemma.

Interestingly, none of the Big 4 US banks (JP Morgan, BoFA, Citibank, Wells Fargo) have shared official information about cash inflows to their coffers affected by SVB. However, several founders and VCs have posted all over social media and his WhatsApp group about moving deposits to big banks. Some even mix banks and accounts.

“Our plan so far is to keep cash below $250,000. [the FDIC insured limit] To wind things up from there on SVB, I use Chase as my main operating account and Mercury as my venture fund and credit card account.

Meanwhile, the Ministry of IT estimates that within a week of the crisis, SVB deposits worth $250 million flowed into GIFT City branches of Indian banks (ICICI, Kotak, etc.). All in all, the Indian startup is estimated to have had over $1 billion in cash backlogged when SVB went down.

However, opening an account at a GIFT City branch remains a challenge. “From Mercury he had a hard time relocating to his ICICI and Kotak branches in GIFT City. They ask for an IFSC code, but none of the banks have an IFSC code,” one founder shared in a WhatsApp group Did.

As the CFO of a vertical SaaS startup explains: When it comes to GIFT City money transfer, SWIFT and account number are important and the transaction was successful. ”

Several founders affected have also found other smaller fintechs. “If you are looking for another bank, check out Levro. Each account has its own International Bank Account Number (IBAN), the DC-based health tech startup revealed, adding, “As long as you have a US entity, you can give them an account. You can open them and they’re super fast,” she added.

What is abundantly clear from the SVB crisis is the need for early diversification and risk management. And startups have learned their lesson.

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