Tech:NYC Digest: March 14

Tech:NYC Digest: March 14

March 14, 2023 • Estimated Reading Time: 7 minutes

Tuesday, March 14, 2023

Oh, Happy Pi Day! 🥧 In today’s digest, we bring you the latest updates on the SVB and Signature Bank fallouts, while we also begin the transition back to our regularly scheduled programming.

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  • First Republic Bank, which is the 14th largest bank in the New York market, saw its shares rise by more than 50% in early trading today, bringing some stability to what many were concerned could result in the next bank run. (TechCrunch)

    • However, alongside five other US banks, First Republic remains on Moody’s “downgrade watch list” for now. (Bloomberg)

  • NYC is beginning a redesign of a seven-block stretch of Broadway — between Madison Square and Herald Square — to make it more pedestrian-friendly. A cornerstone of the redesign will ban all vehicles between 25th and 27th Streets, as well as add more outdoor dining plazas, curb extensions, and a two-way bike lane. (Gothamist)

  • Plans to build a light-rail link to LGA similar to the AirTrain at JFK have been scrapped after a review found it would cost five times the initial estimate to build. (New York Times)

In other reading:

  • What’s next in New York after the failure of Silicon Valley and Signature Banks (Crain’s New York Business)

  • Déjà vu? 2 summer primaries could be in store for NYC voters (Gothamist)

  • Can Revel get NYC’s EV charging system out of neutral? (The Verge)

Here’s the latest to know about the SVB fallout, day five:

The Justice Department has officially opened an investigation into the collapse of SVB. (New York Times)

  • The investigation is in the very early stages, and it’s unclear what prosecutors are focused on, but some suggest it will likely target the sale of company shares by several SVB executives in the weeks before the failure.

At the close of the second day of FDIC guardrails being in place, it appears the backstops are holding. (TechCrunch)

  • Many of the startup founders in the Tech:NYC network with deposits at either SVB or Signature Bank have updated us to confirm they’ve regained access to their accounts.

  • Other banks considered at risk — namely, First Republic Bank — bounced back considerably in early trading this morning after being down 60% yesterday. Several other regional banks also saw rebounds that shored up more confidence from customers.

A second auction to sell off SVB’s assets is in the works after the first landed with a thud. (Wall Street Journal)

  • There’s more likelihood that several SVB entities will be diced up to increase the chances of courting potential buyers. The second attempt to auction Silicon Valley Bank,  the bank regulators closed on Friday, could be split from SVB Capital, the $10 billion venture arm also put up for sale. SVB Securities, the investment banking division, is also individually up for sale. SVB’s UK unit has already been acquired by HSBC for £1.

Even after the dust settles, startup founders will be lamenting the loss of SVB’s model some time to come. (The Information)

  • For young companies, in particular, SVB stood out over larger institutions, which often have more onerous lending terms, and for its tighter-knit relationships with investors and VC funds. One of the primary questions now is whether SVB’s eventual buyer or other large banks can replicate those advantages.

  • Mitiga, a NYC-based cloud and SaaS incident response company, raised $45 million in Series A funding. ClearSky Security led the round and was joined by Samsung Next, Blackstone, Atlantic Bridge, and DNX.

  • Tweed, a NYC and Tel Aviv-based wallet and payment solution platform, raised $4 million in seed funding. Accel led the round and was joined by Communitas Capital Partners, Zero Knowledge Ventures, and other angels.

  • March 15: In-person: NY Enterprise Technology Meetup, with Haystack partner Semil Shah, Cowboy Ventures partner Amanda Robson, Streamdal CEO Ustin Zarubin, and others. Hosted by Work-Bench. Register here.

  • March 15: In-person: NY Product Meetup, with Regal co-founder, CTO, and head of product Rebecca Greene. Hosted by Productboard. Register here.

  • March 16: Virtual: Fintech’s inflection point, with Bain Capital Ventures partner Matt Harris. Hosted by Axios. Register here.

  • March 18: In-person: School of Data 2023, with State Senator Kristen Gonzalez, Council Member Jennifer Gutiérrez, EquityNYC director Sara Shoener, and others. Hosted by BetaNYC and the NYC Office of Data Analytics. Student, scholarship, and hardship tickets are available. Register here.

  • March 29: Virtual: Exchange: A New Kind of Investor Conference, with A Starting Point co-founder Chris Evans, ARK Invest CEO Cathie Wood, NYU Stern School of Business professor Scott Galloway, and others. Hosted by Public. Register here.

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