Business

The JPMorgan project will push the bank further into the market serving private companies


JP Morgan CEO Jamie Dimon delivers a speech during the inauguration of the new French headquarters of US bank JP Morgan on June 29, 2021 in Paris.

Michel Euler | AFP | beautiful pictures

JPMorgan Chase is preparing to switch to full-scale operation for private companies.

Over the past year, the bank has been quietly hiring programmers and creating products for a new fintech business that offers a wide range of services to startups and investors around the world, According to people knowledgeable about the matter.

The business, known internally as “Project Bloom” for its goal of helping early-stage private companies grow, is run by Michael Elanjianhead of digital private markets, said the people, who spoke on condition of anonymity, prior to the launch.

JPMorgan, the largest bank in the United States by assets, raised eyebrows last month when they said costs would increase this year, in part because the annual tech budget has grown to at least $12 billion. CEO Jamie Dimon is investing aggressively to help its bank battle fintechs, and executives see an opportunity to create a private market winner before startups can dominate the space .

A key part of Project Bloom is JPMorgan’s digital client network that will connect startups with investors, helping them with funding rounds, the people said. Other planned services include assisting companies to sell shares in the form of an offer to buy or provide loans on private equity, providing a digital interface for secondary trading of their shares. private equity firms and help venture capital firms raise new capital.

While elements of these services exist across JPMorgan’s extensive operations, the new effort aims to create a one-stop digital portal for startups and venture capitalists. insurance, family offices and other institutional investors, these people said.

This business is intended to attract services from corporate and investment banking, commercial banking and corporate private banking. For example, private market trading desk first reported by CNBC in 2020 will include the new platform, according to sources.

By creating a self-service platform, JPMorgan is able to target smaller, earlier-stage companies than their bankers have traditionally been, helping them raise funds and pitch proposals. automatic export, these people said.

JPMorgan’s move comes as the number of private companies being founded continues explosive. Investors are on the move billions of dollars into the asset class in the hope of catching companies before they mature and their growth prospects falter, and startups stay private for longer because of their near-access to capital. infinite.

Since the start of the pandemic in 2020, the number of unicorns, or private companies valued at $1 billion or more, has more than doubled to 1,032, which has an overall valuation of $3.4 trillion, according to data provider CB Insights.

That has raised the fortunes of startups like Carta, Brex and Fake serve private companies in one way or another. Banks have historically directed their services to public companies and older startups that are approaching public listing, leading to an increase in specialty vendors.

Now, JPMorgan seems to be betting that if it can create a full-scale network of private companies before the fintechs do, its place in a future where companies can’t. Private even greater importance will be guaranteed.

Stealth Mode

The new JPMorgan business has grown to 80 or more employees operating in stealth mode, separate from other JPMorgan employees in more than half a dozen cities around the world, including in New York and New Jersey ; Plano, Texas; Chicago; Glasgow; People said London and Buenos Aires.

The bank is in the recruitment phase, promoting 200 employees to the private market business by the end of the year and is especially looking for software engineers, data processing experts and artificial intelligence, according to the report. job list.

“We are building an exciting and highly configurable new data-driven fintech business for the company, with the goal of creating a market-leading platform for private markets,” the bank said. in one Work. The “build product” team brings together data scientists, financiers, former entrepreneurs, product managers, designers and engineers who work together with the benefits of a startup culture that can can drive the scale of JPM.”

Other Workthis report, for a business development manager, said the bank was looking for “individuals with business experience” such as founders and investors to help them acquire clients for the business, called the Digital Private Market.

In response to inquiries, JPMorgan spokeswoman Jessica Francisco responded: “We’ve been a leader in the private equity markets for many years, and we see an opportunity to deliver new digital capabilities. for private companies and investors.”

News of the project started spreading among JPMorgan and its competitors earlier this month after Elanjian gave a presentation to Dimon and 200 other executives at the bank’s annual senior leadership conference in Miami, according to familiar people.

The company is preparing to release a suite of products this year and recently introduced its first software to a small group of customers, the people said.

Elanjian, who joined JPMorgan from Archival Goldman Sachs in 2018, hoping to sign several hundred companies and hundreds of investors into the platform before its official launch later this year, according to these people.



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