// STARTUP COMPARISON
Addi (2023 crisis) vs Silicon Valley Bank
Addi (2023 crisis) failed in 2023 due to Unit Economics. Silicon Valley Bank failed in 2023 due to Unit Economics. Both failed for the same reason — Unit Economics.
| METRIC | 🔥 Addi (2023 crisis) | 🔥 Silicon Valley Bank |
|---|---|---|
| Sector | Fintech | Fintech |
| Country | Colombia | USA |
| Founded | 2018 | 1983 |
| Died | 2023 | 2023 |
| Raised | $400M | Public company (SIVB) |
| Peak | $400M raised | $209B assets |
| Primary Cause | Unit Economics | Unit Economics |
// WHY EACH FAILED
🔥 Addi (2023 crisis)
Unit Economics
Addi built a buy-now-pay-later platform for Colombian retail, raising $400M and processing billions in transactions. When global interest rates rose sharply in 2022-2023, Addi's cost of capital exceeded its loan yields. The company laid off significant portions of its workforce in 2022 and 2023, paused expansion, and restructured its lending book to focus on lower-risk, higher-margin segments.
// LESSON
Emerging market BNPL carries currency risk on top of rate risk. When dollar funding costs rise while local currencies weaken, the model breaks on both ends simultaneously. Price this risk into your unit economics from day one.
Emerging market BNPL carries currency risk on top of rate risk. When dollar funding costs rise while local currencies weaken, the model breaks on both ends simultaneously. Price this risk into your unit economics from day one.
🔥 Silicon Valley Bank
Unit Economics
Silicon Valley Bank collapsed in March 2023 after a bank run driven by duration mismatch. SVB had invested deposits in long-duration bonds during low-rate periods. When rates rose, those bonds lost value. SVB announced a $1.8B loss on bond sales and a capital raise — triggering a $42B bank run in 24 hours. The FDIC seized SVB on March 10, 2023 — the second-largest bank failure in US history.
// LESSON
Asset-liability duration matching is not optional for banks. Investing short-term deposits in long-term bonds is a structural bet against rising rates. SVB had $80B in long-duration bonds when the Fed began the fastest rate rise cycle in 40 years.
Asset-liability duration matching is not optional for banks. Investing short-term deposits in long-term bonds is a structural bet against rising rates. SVB had $80B in long-duration bonds when the Fed began the fastest rate rise cycle in 40 years.
// IN THE SIMULATION
Addi triggers BNPL_RATE_SQUEEZE — the simulation models emerging market BNPL as doubly exposed to rate rises: cost of capital rises in USD while local currency devalues, creating a spread compression that no product change can fix.
SVB triggers DURATION_MISMATCH_BANK_RUN — the simulation models banks with long-duration bond portfolios as having existential rate sensitivity. A 400bps rate rise on a long-duration portfolio creates mark-to-market losses that exceed capital when forced to sell.
// EXPLORE FURTHER