On Friday, the California Department of Financial Protection and Innovation (DFPI) closed Silicon Valley Bank ("SVB") and appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver. Earlier today, the New York State Department of Financial Services (DFS) closed Signature Bank (“Signature”) and appointed the FDIC as the receiver. In addition, the Federal Reserve, FDIC, and U.S. Department of the Treasury announced that insured and uninsured depositors of both SVB and Signature would be fully protected.
First, I would like to recognize that this is an extremely difficult time for many businesses that banked with SVB and Signature and for their thousands of employees. Second, I wanted to quickly update our customers who have inquired about Plooto's relationship with SVB.
I would like to start by sharing with you that Plooto is fully operational and well-capitalized. We recently closed a Series B funding, with over 99.5% of our corporate cash kept outside of US banking institutions. (Plooto Series B funding announcement).
Next, as Plooto is primarily a Canadian-focused company, with most of our customers based in Canada, our exposure to SVB was extremely limited and mostly centered around our ability to deliver cross-border payments to US payees. It is certainly promising that the U.S. federal government has stepped in to support SVB, but we still expect there could be delays in accessing funds and other operational issues for US customers. Here's what this means for our Canadian customers:
Canadian-domiciled customers: There is no impact. SVB was not a processing partner for us in Canada, and we did not have any debt or revolving facilities from SVB as an entity.
Canadian-domiciled customers with cross-border payments to/from US payees: We are working closely with our US counsels to monitor the situation minute by minute. We have multiple processing partnerships that allow Plooto to continue delivering payments in the US. We may experience some delays in processing certain payments as we assess the situation and amend routing as needed but you may continue to use Plooto to process payments as usual. Our top priority is to ensure a consistent experience for all our customers.
US-domiciled customers: Please refer here for more information.
As we continue to monitor the situation closely, my promise to you is to keep our communication channels open and offer updates on a regular basis (visit our blog for updates). I would like to reiterate that Plooto is a solid business, and we expect the events to be limited to and contained within the US banking system. As always, you can reach out to me or to our Support Channels for any further inquiries at support@plooto.com.
We remain committed to the success of SMBs across North America, and we thank you for your continued trust in us. My hope is that the tech community can come out of this situation stronger.
Sincerely,
Hamed Abbasi, Co-Founder & CEO