Brex reportedly gets billions from SVB customers

Fintech startup, Brex, received billions of dollars in deposits from Silicon Valley Bank (SVB) customers on Thursday, according to sources close to the situation. Brex was a beneficiary of the advice given by venture capital firms to their portfolio companies to withdraw funds from SVB. This led to thousands of new accounts being opened, amounting to billions of dollars in inflows. However, by midday Friday, the Federal Deposit Insurance Corp had shut down SVB and taken control of its deposits.

Several other firms, including JPMorgan Chase, Morgan Stanley, and First Republic, also experienced increased inflows on Thursday as SVB’s stock price fell. The dramatic decline in SVB shares triggered a sector-wide sell-off, which was reminiscent of the 2008 financial crisis. Earlier in the week, Silvergate, a crypto-focused bank, announced that it was winding down operations.

Brex has not commented on the inflows it received on Thursday. The sudden exodus of deposits put considerable pressure on SVB, which had attempted to raise equity funding earlier in the week and had explored the possibility of a sale. The regulator’s intervention highlights the importance of financial stability and underscores the risks associated with startups and the fintech sector.

In summary, Brex, a fintech startup, was a beneficiary of the advice given by venture capital firms to their portfolio companies to withdraw funds from Silicon Valley Bank. This led to an influx of billions of dollars in deposits into Brex’s accounts. However, by midday Friday, the Federal Deposit Insurance Corp had shut down SVB and taken control of its deposits. This event triggered a sector-wide sell-off, highlighting the importance of financial stability and the risks associated with startups and the fintech sector.