Gloroots moves funds to Mercury and diversifies banking after SVB collapse

In early March 2023, Silicon Valley Bank announced a $1.8 billion loss on government‑security sales and a plan to raise $2.25 billion, triggering a bank run. Gloroots, a Bengaluru‑based startup that helps companies hire internationally, held all of its $300 000 in SVB because the bank allowed remote account opening with no minimum balance. Founder Yamini Jain said she panicked after an investor warned of the impending run and spent hours trying to move the money, only to be turned away by traditional U.S. banks that required a U.S.–based executive or a Social Security Number.

On March 13 Jain succeeded in transferring the full amount to Mercury, a fully online neo‑bank, and announced that Gloroots would keep at least half of its funds in a second bank going forward. Her investor All In Capital advised its portfolio companies to diversify banking, noting that the SVB episode showed how a single‑point failure could halt payroll and vendor payments for startups reliant on cross‑border wires.

Secured access to its $300k cash reserves and prevented disruption to cross‑border payroll operations

The SVB collapse revealed the danger of keeping all operational cash in one bank, especially for startups without a U.S. legal presence.

Moving to a neo‑bank that offers remote onboarding allowed Gloroots to regain immediate access to its funds despite lacking a U.S. SSN or local executive.

Committing to a multi‑bank strategy reduces systemic risk and ensures continuity of payroll and vendor payments during future banking shocks.

Startups should avoid concentrating all cash in a single bank and maintain diversified banking relationships to protect against sudden institutional failures.

After the transfer, Gloroots reported no interruption to its payroll or client‑funding operations. Founder Yamini Jain said she would maintain at least two banking relationships and split deposits evenly, a practice she now recommends to other founders. All In Capital, which had 30 % of its portfolio exposed to SVB, circulated WhatsApp alerts urging startups to open accounts at multiple banks and to monitor bank health metrics. The episode contributed to a broader industry shift toward treasury diversification among early‑stage tech firms.