What the Banking Crisis Means for the Beauty and Wellness Industry

On March 10th, the Silicon Valley Bank (SVB) suffered a run that caused depositors to withdraw tens of billions of dollars in deposits, leading to regulators taking over the bank. The bank catered to venture capital-backed companies, including some beauty and wellness brands, such as Veracity, Rebundle and The Flex Co. Following SVB's shutdown, regulators also took over New York's Signature Bank, which held a large concentration of crypto-sector deposits, and had a large share of uninsured deposits. This comes in the wake of cryptocurrency exchange FTX filing for bankruptcy at the end of 2022, which left users unable to access their money. After the dust settled, customers of SVB and Signature Bank retained full access to their deposits, with accounts having more than $250,000 FDIC insurance limit. 

The article discusses the effects of the bank collapses, rescue and rate hikes on the beauty and wellness industry. Cary Lin, co-founder of Common Heir, a brand that didn’t bank directly with Silicon Valley Bank, explains that the biggest impact was stress, constant communication with investors, understanding legal liability and figuring out how to de-risk deposits.