Dimon: JPMorgan Wants More VC and Startup Banking Clients

J.P. Morgan Chase reportedly wants to expand its startup and venture capital (VC) customer base.

Speaking during a conference Monday (Oct. 2), CEO Jamie Dimon said the country’s largest bank is courting these customers, a move that comes in the wake of a series of high-profile bank failures earlier this year.

“We have unbelievable products and services to bring to them,” said Dimon, whose comments were reported by Bloomberg News. “But we have to deliver it to them in a way they actually like it and they want it.”

JPMorgan purchased First Republic Bank in May following that lender’s collapse, the second-biggest bank failure on record in America. The Bay Area-based bank had specialized in serving wealthier customers. 

Another startup-focused bank, Silicon Valley Bank, failed in March and was purchased by First Citizens Bank. As noted here in April, First Citizens’ president Peter Bristow was also seeking to keep its VC and startup customers on board.

“[SVB] was the number one bank in tech and life sciences for over 30 years, and suddenly that went away, so we’ve spent a lot of time trying to give people confidence that we’re in the bank and plan to continue to run the model they were running,” Bristow said in April.

The report noted that some Silicon Valley startups and investors were skeptical of First Citizens, as it had limited venture capital experience. 

“A lot of what SVB did — events, mortgages, venture loans — made no sense economically unless you saw the full life cycle of the relationship,” the head of one multibillion-dollar venture operation told the FT. “They were able to do it because they knew everyone in the ecosystem.”

Before its collapse, J.P. Morgan and 10 other large U.S. banks made uninsured deposits totaling $30 billion into First Republic to make sure it had the liquidity it needed at a time when regional banks were struggling.

According to Bloomberg, Dimon said recently that J.P. Morgan “gained a lot of clients very quickly,” and is expanding its startup/VC-focused business, including “putting more bankers on the ground.” 

Dimon also said Monday that the market for initial public offerings (IPOs) is “open for now” with markets and economy still healthy — though “maybe not for everybody.”

Those comments come in the wake of a trio of high-profile IPOs. As PYMNTS noted on Sunday (Oct. 1), the performance of those listings has led some VC firms to express caution about other startups trying to go public.