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CEO of Silicon Valley Bridge Bank Pitches Customers to Stay
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By Yuliya Chernova, WSJ Pro
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Good day. The new chief executive of Silicon Valley Bridge Bank—which was created by federal regulators to manage Silicon Valley Bank deposits and assets—said the bank is open for new business and honoring existing credit lines.
In an email to clients Tuesday, Tim Mayopoulos also urged clients to keep their deposits in the bank and to transfer back deposits that were taken out in the last several days.
“The number one thing you can do to support the future of this institution is to help us rebuild our deposit base,” Mr. Mayopoulos wrote. “We are also open for business for any new customers,” he added.
Mr. Mayopoulos noted that customers have full access to their money, and that deposits are fully protected by the Federal Deposit Insurance Corp. "This action by FDIC effectively means that deposits held with SVB are among the safest of any bank or institution in the country," Mr. Mayopoulos wrote.
Some venture investors responded positively to the message. On Tuesday afternoon partners at venture firm Founder Collective decided to send some capital back to the bank, said General Partner David Frankel.
Others are holding off on jumping back in.
Chris Olsen, partner at Columbus, Ohio-based Drive Capital, said he received the email as a client. Drive was already diversifying its banking providers and working with its portfolio companies to do the same in recent days. The message from the new CEO of the bank won’t change that, he said.
“The biggest challenge is that trust has been broken between the venture capitalists and the bank,” Mr. Olsen said. “We are all on the receiving end of discovering that when we built an infrastructure on top of Silicon Valley Bank, it was vulnerable,” he said, adding, “It’s going to take time for rebuilding that reputation. That’s more than you can solve in an email.”
And now on to the news...
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Silicon Valley Bank customers wait in line at the lender’s headquarters in Santa Clara, Calif., on Monday. PHOTO: NOAH BERGER/AGENCE FRANCE-PRESSE/GETTY IMAGES
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SVB effect on dealmaking. Many venture capitalists have all but paused investments in startups in the aftermath of Silicon Valley Bank’s collapse, with players focused on managing the evolving situation even after regulators stepped in Sunday to guarantee all deposits of SVB, WSJ Pro's Marc Vartabedian and Yuliya Chernova report.
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Saxon Baum, a partner at Tampa, Fla.-based early-stage venture-capital firm Florida Funders, said that deal making has been essentially put on hold at his firm and others he has been in contact with as investors are still managing the fallout of Silicon Valley Bank’s failure.
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While Florida Funders didn’t bank with SVB and only a few of its 95 portfolio companies had deposits with the Santa Clara, Calif.-based bank, the collapse has had a chilling effect on the venture industry, Mr. Baum said. Two deals that his firm was aiming to close last week with existing portfolio companies got pushed back due to the chaos surrounding SVB’s collapse and could close later this week, he added.
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“It’s definitely a ‘Let’s wait and see how everything shapes out’ situation,” Mr. Baum said.
More coverage:
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10,000
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Number of jobs that Facebook parent Meta Platforms Inc. plans to cut in new round of layoffs
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OpenAI Rolls Out Updated Version of Viral Chatbot ChatGPT
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The company behind the viral chatbot ChatGPT launched a new version of its artificial intelligence technology on Tuesday, saying it was more powerful and predictable than previous versions and capable of analyzing images and handling much larger blocks of text, The Wall Street Journal reports. The announcement from OpenAI—a startup backed by billions of dollars from Microsoft Corp.—is the latest in a string of generative AI announcements as companies try to get ahead in the race to build and use the buzzy new technology.
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Funds
Flat6Labs launched a new $95 million seed fund to invest in early-stage tech startups on the African continent. Headquartered in Egypt, the Africa Seed Fund will back 160 companies with tickets ranging from $150,000 to $500,000.
Rethink Ventures launched with a €50 million fund to make seed to Series A investments in European mobility, automotive and logistics startups. Limited partners include ZF Ventures, Hellmann Worldwide Logistics, KION Group, Berylls, HAVI and European Investment Fund.
Exits
Customer relationship management company Splio acquired predictive marketing startup Tinyclues for an undisclosed amount. Tinyclues counts ISAI, Elaia, Alven and EQT Ventures as investors.
Edtech company Paper acquired Readlee, a learning tool that uses artificial intelligence and speech recognition technology to help students improve their reading skills. Terms weren’t disclosed. In February 2022, Paper said it closed a $270 million Series D round led by Sapphire Ventures and Softbank Vision Fund 2. Readlee is listed in the portfolios of Accellius Capital, Advisors.fund, Brighter Capital, Equal Opportunity Ventures, Hike Ventures and Kern Venture Group.
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Invenda Group AG, a Switzerland-based developer of an operating system for the automated retail industry, landed $19 million in Series B funding. Point Break Capital Management led the round, which included participation from Mutschler Ventures.
Pitchly Inc., a no-code data enablement platform, completed a $7 million Series A round. Homegrown Capital led the investment, which included contributions from Next Level Ventures, ISA Ventures, Great North Ventures, M25 and Cabra.vc.
AG5, an Amsterdam-based startup that maps and tracks employees' skills and qualifications, picked up a €6 million investment from Peak, Headline and Acadian Ventures.
Mayan, a provider of optimization and automation technology for Amazon sellers, secured $5 million in Series A financing led by Bright Pixel Capital.
Upduo, a San Francisco-based peer-to-peer learning platform for teams, was seeded with a $4 million investment. Lead investor Impact Venture Capital was joined by Sky9 Capital and others in the round.
ALEX, a Singapore-based decentralized exchange on bitcoin, grabbed a $2.5 million investment from Gossamer Capital, Trust Machines and others.
Captain Experiences Inc., an Austin, Texas-based platform for booking outdoor sports guides, picked up a $2 million investment led by Bullish.
Entre, an Austin, Texas-based professional networking startup, fetched a $1.6 million seed investment led by Octane Fund.
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Corrections & Amplications: Mitiga, a New York-based cloud and software-as-a-service incident response startup, closed its Series A round, bringing the total amount raised by the company to $45 million. A New Money item in Tuesday's newsletter incorrectly said Mitiga closed a $45 million Series A round.
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An image released by Activision Blizzard shows a scene from ‘Call of Duty: Infinite Warfare.’ PHOTO: ACTIVISION/ASSOCIATED PRESS
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