Banks and fintechs that stepped in to help startups move their deposits from the now bankrupt Silicon Valley Bank (SVB) to accounts elsewhere are emerging as the big winners following the collapse of the U.S. bank.
Brazilian fintech Trace Finance, for example, brought forward the launch of its current account in the U.S. and managed to move some US$200 million belonging to clients of SVB, the fintech’s founder Bernardo Brites told iupana.
The amount corresponds to deposits received in between March 9 and 10, during a bank run at SVB that culminated in its seizure by the U.S. authorities.
“We are opening like 30 or more accounts a day,” said Bernardo Brites, co-founder and CEO of Trace Finance. “Startups need an ally that can do their banking securely,” he told iupana.
On Friday March 10, the day the authorities shut SVB down, Trace Finance didn’t have an operating digital account, only a waiting list. That same day, it received more than 500 requests to open an account. To date, most of the account holders are former SVB clients.
Industry executives told this publication that, in the wake of SVB’s collapse, dozens of Latin American fintechs scrambled to find places to move their money, some of them turning to banks such as JP Morgan and Bank of America. Others said they were looking for traditional banks in Latin America to process their payments, payroll and money movements.
Brites said Trace Finance doesn’t plan to launch new financial products for their growing client base in the short term. “We prefer startups to have one account that does everything they need, securely, before creating other products.”