Founded by Sarah Puil in 2020, BOXT is an ''environment-first'' beverage startup in Austin offering luxury wine packaged in compostable and refillable boxes as opposed to glass bottles and is delivered directly to customers.
“The big point is we want to be your house wine,” she said. “During the week you don't always want a full bottle but once you open a bottle, it doesn't stay fresh for that long. In the box the wine stays fresh for up to six weeks. There's no reason why good wine can't be in a box.”
BOXT, however, is one of about 10,000 small businesses nationwide that could be unable to meet payroll demands due to Silicon Valley Bank (SVB)’s collapse, according to media reports.
“We were not able to secure all of our funds,” Puil told the Austin Journal. “As an early-stage startup, every day brings new challenges but this is certainly one that we could not have anticipated. It put our team in a spot.”
As previously reported by the Associated Press, SVB, which caters to startups and the tech industry, failed because its customers rushed to make withdrawals after a call to raise $2 billion in capital was announced. However, regulators intervened equally fast by taking control of SVB’s assets.
SVB’s collapse represents one of the largest among U.S. financial institutions since the 2008 financial crisis. Among national asset seizures, it is second only to Washington Mutual in 2008.
“It's not just about the deposits,” Puil said in an interview. “In the startup universe, we rely on venture funding and private investors to help us get the business to where it needs to be. The funding environment was already tough over the last couple of quarters and now this has made it really, really, really tough.”
Other than murmurs a week before, Puil did not notice any red flags in the capital markets leading up to SVB’s failure.
But analysts online pointed to an Austin-based fin-tech newsletter called 'The Diff' as possibly setting off a venture capital-instigated and social media frenzy by noting in late February that SVB was highly leveraged. On March 11, business analyst Evan Armstrong tweeted on Twitter, "Kinda insane that this entire debacle was potentially caused by @ByrneHobart's newsletter."
Puil remains skeptical.
“I don't think you could possibly assume or think or contemplate that your bank is going to blow up,” she said.
In a statement posted online March 12, House Financial Services Committee Chairman Patrick McHenry (R-N.C.) called the collapse "the first Twitter-fueled bank run" following the actions announced by the Federal Reserve, Treasury Department, and Federal Deposit Insurance Corporation (FDIC) pertaining to SVB.
"Silicon Valley Bank was an incredibly important partner to the innovation economy," Puil said. "Their bankers in the local Austin area were more than just bankers. They were our friends and they were really involved in our business, helping make connections and making sure that we were in front of the right people and that our products were in front of the right people."
Despite the surprise of the fallout, Puil hopes that BOXT will remain standing with the help of the federal government and her customers.
“The FDIC and the feds have said, ‘Your deposits are whole,' so now we're working with the bank to make sure everything is intact,” Puil added. “We're working on our restoring our access to the debt that we had secured, which is probably the bigger issue right now because obviously, we're a company that requires inventory and inventory is expensive to purchase. Having all the working capital that we had access to, whether it was our cash or debt, is really the order of business this week.”