The recent collapse of Silicon Valley Bank (SVB) has sent shockwaves across the global fintech industry, adding further challenges to an already tumultuous year. Our thoughts are with all those affected by the situation. While we will not delve into every intricate detail of SVB’s downfall, examining its history and extensive involvement in the fintech ecosystem can offer valuable insights for the industry, enabling us to learn from them as a community. Before we get into that, here’s a concise summary of the events that have transpired, charted out to set the context and bring you up to speed with the current state of affairs:Silicon Valley Bank has been a bank for startups since 1983, requiring them to pledge all their assets as collateral and maintain all their accounts and excess cash with it.Due to the pandemic, the US central bank lowered interest rates to nearly zero to encourage borrowing and spending, leading to growth in bank deposits from 2020 to 2022. Banks invested these deposits in government-backed securities while meeting regulatory requirements.Startups also benefited from this and attracted venture capital investment, leading Silicon Valley Bank to receive many of these deposits due to being a popular choice among startups.SVB’s deposits […]