Etsy is warning sellers that the collapse of Silicon Valley Bank on Friday is causing delays in processing payments, according to an email from the company shared with NBC News.
The online do-it-yourself goods mega shop said it used SVB to facilitate disbursement to some sellers, and that it was working with other payment partners to issue deposits.
“We wanted to let you know that there is a delay with your deposit that was scheduled for today,” the email from Etsy said. “We know that you count on us to help run your business and we understand how important it is for you to receive your funds when you need them,” the email continued. “Please know that our teams are working hard to resolve this issue and send you your funds as quickly as possible.”
In a written statement Saturday, an Etsy spokesperson said the issue was related to “the unexpected collapse of Silicon Valley Bank”.
According to NBC News, the drama with SVB started earlier this week when the bank disclosed that it sold about $21 billion of securities and proposed to offer over $1 billion in shares, all to fundraise for “general corporate purposes.”
That move raised eyebrows among investors who pondered why SVB would need to raise so much money abruptly. It also worried depositors, many of whom suddenly wondered whether their money was safe and began pulling funds out.
Bloomberg (via Yahoo! Finance) reported Peter Thiel’s Founders Fund had no money with Silicon Valley Banks as of Thursday morning as the bank descended into chaos, according to a person familiar with the matter.
Founders Fund withdrew millions from SVB, said the person, who asked not to be identified discussing private information. It joined other venture funds that took dramatic steps to limit exposure to the now-failed financial institution. Founders Fund also advised its portfolio companies that there was no downside to moving their money away from SVB, even if the risk was low.
According to Bloomberg, Founders Fund acted in other ways to move its business away from SVB. On Thursday, as the bank was beginning to unravel, the firm started what’s known as a capital call. That’s a run-of-the-mill activity in the venture capital world, in which a VC firm asks its investors to make investments in startups – the core function of most VC firms. It began by asking those backers to transfer the funds to accounts at SVB, as it had done for years, the person said.
But the firm learned that its limited partners were encountering issues using SVB services as they tried to transfer the funds – they weren’t immediately going through as expected, the person said.
Quickly, Founders Fund asked its investors to transfer the money to the other banks instead. The fund acted to ensure that startup funding deals that were slated to close in the coming days were not delayed, the person said.
If I’m understanding this correctly, it appears that Peter Thiel’s Founders Fund – might – have been the start of SVB’s collapse. Or, at the very least, was the first to be aware that a collapse was going to happen.