Silicon Valley Bank Bust Ripples Through Retail Industry

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As a financier of choice for digital innovators, Silicon Valley Bank’s (SVB) recent collapse will be felt across many industries, including the consumer-facing companies that depend on technology for ecommerce operations and seamless payment systems. As consumer spending accounts for about 70% of the US economy, it’s a big deal now and may become a bigger deal later if the fallout begins to choke off investment in new digital ventures.

Some of the immediate effects being reported by outlets such as and Barron’s Magazine include:

  • Shopify temporarily halted payments to online sellers with SVB accounts, and Etsy sellers had payments briefly delayed.

  • Stitch Fix, the clothing subscription box service, lost a $40 million line of credit it had at SVB.

  •  CNN reported that New York-based toy retailer Camp’s co-founder Ben Kaufman emailed customers to tell them that the company had most of its cash assets at SVB and was slashing prices to help fund operations, offering a temporary 40% coupon code: “BANKRUN.”

  • Children’s direct-to-consumer brand Slumberkins posted on Instagram that most of its capital had been at SVB. It also for a time offered customers a 40% discount.

  • For designer brands, the banking crisis “creates more uncertainty in an already uncertain environment,” according to Gary Wassner, CEO of Hilldun Corp., a factoring and accounts receivables provider for many designers.

  • Venture-backed direct-to-consumer brand Omsom, which sells  premixed spice packs for Asian dishes, posted on Instagram that SVB “was our bank.” According to, CEO Vanessa Pham said, “It’s a common misconception that what happened with SVB only poses a threat to big tech.”

For several years now, retailers have been making the pilgrimage to Silicon Valley looking for capital and early access to game-changing technology. In 2017, Walmart, with its deep pockets and long time horizon, launched Store No.8, a Silicon Valley-based ecommerce investment firm aimed at incubating new startups and entrepreneurs.

Silicon Valley attracted retailers because it is where the future of frictionless commerce is being created, but also where capital-hungry startups could more easily find venture capital and private equity players that have an appetite for risk. The downside has manifested itself in the takedown of SVB but also can be seen in the wrecking of iconic brands like Bed Bath & Beyond, which found itself being managed not by retail industry veterans but by the wolves of Wall Street.

This interlude may provide an opportunity for brands and retailers to look outside of Silicon Valley for great ideas and innovations to solve their problems and avoid the undertow that comes with fast-money investors.

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