Silicon Valley Bank's stranded deposits spread the pain from Tech Valley to Napa Valley

The ripple effects of one of the biggest US bank runs in over a decade are reaching a wide variety of businesses, as companies from startups to vineyard owners raise alarms.

Silicon Valley Bank, once a darling of the California financial system, fell swiftly on Friday, a day after investors and depositors tried to make $42 billion in withdrawals. Roku Inc., LendingClub Corp. and Eiger BioPharmaceuticals Inc. were among dozens of companies that revealed they have deposits stuck at the bank.

The stranded funds show that SVB's troubles are spreading throughout the Silicon Valley ecosystem and pose a risk to the economy at large. Former Treasury Secretary Lawrence Summers warned that there will be "severe" consequences if regulators don't fashion a smooth transition for Silicon Valley Bank.


"It certainly is going to have very substantial consequences for Silicon Valley and for the economy of the whole venture sector, which has been dynamic unless the government is able to assure that this situation is worked through," Summers said in Bloomberg Television interview.

SVB Financial Group, the bank's parent, has been well-known for its links to startups and well-established technology companies in the Golden State and beyond many of which provided millions in deposits. The US Federal Deposit Insurance Corp. insures deposits up to $250,000. More than 93% of SVB's domestic deposits were uninsured at the end of last year, the bank said in a filing.

Around 26% of Roku's cash and cash equivalents are held by SVB, or around $487 million, the streaming technology company said in a Friday filing. SoFi said it has a $40 million lending facility provided through SVB, which is "unaffected" by the FDIC's receivership.