JPMorgan is investing in California startup, Zanbato. Some investors are more familiar with the fintech platform as ZX, and since its launching in 2016, Zanbato has grown to have over 100 brokers and bankers as some of its members. Even though Morgan is the largest U.S. bank by assets, it can’t match that.
Zanbato also has links with Palantir, a data software manufacturer. Joe Lonsdale, a co-founder of Palantir, also co-founded Zanbato with Nico Sand and Kevin Leung.
JPMorgan started trading private firm stock six months ago, and since then, its business has grown exponentially. Venture capitalists have dumped hundreds of billions into private equity firms over the past decade. Firms with venture backing are now valued at over $2 trillion and growing.
Morgan started taking an interest in Zanbato to increase the bank’s goal to connect sellers and buyers of promising pre-IPO companies. According to a spokesperson, JPMorgan plans to make more similar investments in trading platforms that could help the bank have more access to private securities companies.
Private stock firms are growing and include companies like Stripe, Robinhood, and SpaceX.
According to Nico Sand, “Companies are staying private for so long that some of these early investors are 10X-plus on a position. Being able to manage oversized positions, these are things that every manager has done forever. But in private markets, you just never had the liquidity to employ these basic portfolio management techniques.”
During the past year, Zanbato has doubled its user base, and its volume of transactions has tripled. It can take weeks to close a private share transaction because the process is still completed manually in many cases. But, Zanbato is looking to automate and speed up the time it takes to close those deals.
Neither JPMorgan nor Zanbato have disclosed how much JPMorgan has invested in the private fintech.