JPMorgan Chase Invests in Private Stock Trading Platform with Links to Palantir to Boost Bank Efforts to Connect Buyers and Sellers of CNBC Learned It Is Pre-IPO Hot Company Stocks

The bank’s investment in Zanbato, a Mountain View, California-based fintech start-up, is due to be announced Monday, according to experts. Zanbato was co-founded in 2010 by Joe Lonsdale, the entrepreneur who also owns data analytics firm Palantir co-founded

According to Andrew Tuthill, global head of private markets, the move marks the first in a series of investments JPMorgan can make in trading venues and exchanges that will give the bank access to data and prices in the burgeoning and fragmented private company securities market facilitate stocks

In the six months since JPMorgan began trading private company stocks – ???? A market that includes giant companies like SpaceX, Robinhood, and Stripe The new store has seen strong growth, with order flow and demand from trading partners roughly doubling every month since CNBC first reported operations in September, Tuthill said

Interest in pre-IPO companies has grown dramatically in recent years, luring JPMorgan to an area where smaller companies have operated on the West Coast, in part because venture capital investors have raised hundreds of billions of dollars over the past decade Venture-backed firms valued at more than $ 2 trillion last year, according to PitchBook data

As hedge funds and family offices increasingly seek to buy stocks of private companies, executives, and early investors in startups in search of return, they also seek to sell positions they have held for years according to Nico Sand, CEO of Zanbato

“Companies stay private for so long that some of these early investors get more than 10x their position,” Sand said in an interview. “To be able to manage oversized positions, these are things every manager does forever did, but in private markets you just never had the liquidity to use these basic portfolio management techniques, “he said until now,

The Zanbato platform called ZX, which was launched in 2016, has more than 100 banks and brokers as members This gives it a reach in private equity trading that no single company can match, not even as big as JPMorgan’s largest U.S. Bank according to assets

JPMorgan’s investment is the first by a bank member on the ZX platform, and Zanbato is likely to allow more members to invest in the coming years, Sand said

The startup’s number of users more than doubled over the past year, while the volume of transactions more than tripled, said Sand, who co-founded Silicon Valley with Lonsdale and senior engineer Kevin Leung Zanbato Most ZX -Members saw record levels of private stocks trading last year, he said

Larger valued private companies that have been around for many years and that have a large number of investors are likely to be the top-traded names, Sand added

The investment shows that JPMorgan is willing to rely on outside, technology-based providers when it comes to serving its trading and wealth management clients, rather than building all of its capabilities in-house, as the companies would neither the level of the stake nor the Disclose the amounts paid by JPMorgan

While trading private stocks is mostly still a manual process that can take weeks to complete a transaction, startups like Zanbato are trying to ramp up standardization in the emerging market, which will ultimately aid the onset of automation and cutting the time to close deals, just as technology has cut the time to trade public stocks

“One of the things we say in the private market is that time is the enemy of any business,” Tuthill said. “Zanbato creates efficiency in execution which hopefully shortens the time it takes to get one Complete deal “

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World News – CA – JPMorgan is investing in private equity trading location with Palantir link amid demand for pre-IPO stock

Source: https://www.cnbc.com/2021/02/22/jpmorgan-invests-in-private-stock-trading-venue-with-palantir-link-amid-demand-for-pre-ipo-shares.html