Big banks have seen the most deposits from startups since SVB’s collapse—but there’s one startup in the mix

Matt Martin got to see a bank run in real time.

At the 2023 SV Angel’s Founder Summit, Martin, cofounder and CEO of Clockwise, was in a room filled with tech founders and luminaries, on the Thursday that Silicon Valley Bank’s collapse became evident. By Friday, the FDIC would step in.

“The backdrop of the SVA conference was kind of amazing because it was probably the worst thing that could have happened to SVB,” Martin said. “All these founders, all these VCs, all these pillars of the tech community—and everyone’s on their damn phone and laptop, asking one another, 'What’s going on with SVB?'”

Elsewhere in the Bay Area, Mercury CEO and founder Immad Akhund was at his desk at home and hadn’t yet entirely realized how much chaos was about to ensue. By Friday, Mercury, which provides accounts for startups through its bank network, was on the receiving end of a flood of deposits from panicked SVB customers, including Martin.

“There was obviously this initial bump of about $2 billion in deposits and about 8,700 customers in a two-to-five-day period, maybe the two weeks netted out around the SVB collapse,” Akhund said.

Mercury then had a task: to retain those customers. Fast-forwarding to today: The startup seems to have succeeded. Data from fintech Capchase suggests that Mercury has been one of the key beneficiaries of SVB’s downslide, and has held its ground in the year that’s elapsed since. Capchase’s data, reflecting the banking practices of 2,618 startups, shows that Mercury’s cash balance has increased by more than $11.2 billion between Q1 2023 and Q1 2024, as startups have deposited more and more money in Mercury-run accounts.

Mercury is only surpassed by Chase, with its cash balance increasing by $11.8 billion. Though data shows Chase and Mercury neck and neck, the next closest is Bank of America, up by $5.5 billion. SVB’s cash deposits in that pool and time frame are down by $13.7 billion, according to Capchase’s data.

“This data tells us that fintechs and neobanks are here to stay even after SVB's collapse since there is demand for the services that they offer, even at a time when startups are looking for ‘safe’ places to park their cash,” said Miguel Fernandez, CEO and cofounder of Capchase, via email.

Mercury says January and February marked the highest sign-up volume they’ve seen since March 2023. Hearing that, I can’t help but think there’s good news and bad news here, and they are one and the same: Mercury is competing with the biggest banks in the U.S. for startup customers.

On one hand, that is a reminder of the company’s ascension. On the other hand, Mercury has to prove that time is on its side. Banks, after all, are hundred-year institutions. The two banks primarily making up JPMorgan Chase are J.P. Morgan & Co., founded in 1871, and Chase National Bank, founded in 1877.

So, what’s keeping Martin at Mercury? He says it’s “holistically a better product.” But there’s another reason. “It's because they were there for us,” Martin says. “Mercury was there for us to make sure that we got through that moment and we made payroll.”

See you tomorrow,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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This story was originally featured on Fortune.com