Online marketplace Etsy is struggling to pay some of the sellers who use its platform because of the Friday collapse of Silicon Valley Bank (SVB), Forbes reports(Opens in a new window).
The collapse of SVB, which ranks as the US’ 16th largest bank, came after billionaire investors like Peter Thiel pulled their money(Opens in a new window) out after concerns about the bank’s health mounted this week.
As of Friday, the bank is in the hands of the US government, and under the control of the Federal Deposit Insurance Corporation (FDIC), the body responsible for paying out deposits. According to Reuters(Opens in a new window), the FDIC is attempting to find another bank willing to merge with SVB in order to minimize the effects of the collapse.
In an email to Forbes, an Etsy spokesperson said: “At Etsy, supporting our sellers is our highest priority, and we understand how important it is for these small businesses to be able to receive their funds when they need them.
“We recently experienced a delay in issuing payments to some sellers related to the unexpected collapse of Silicon Valley Bank. Our teams have been working around the clock to implement a solution, and we expect to pay sellers via our other payment partners within the next several business days.”
In a similar statement on its website(Opens in a new window), the online marketplace further apologized “for any inconvenience” the delay in payments has caused.
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The event marks the biggest bank failure since that of Washington Mutua(Opens in a new window)l in 2008, during the Great Recession. Small tech start-ups make up a significant share of SVB’s customers, and the collapse has left some unable to log into their accounts to take out their cash.
As TechCrunch reported(Opens in a new window), some startups have been unable to reach anyone at the bank and were unable to take cash out this week when news of SVB’s financial troubles first broke, while some startups are likely to miss payroll.
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