Fintech startup Zanbato has secured a strategic investment from J.P. Morgan as a first step in further aligning Zanbato’s ZX platform with its membership through equity participation.
Private stock trading has gained increased demand as top funds and institutional investors turn to secondary markets to manage their private company exposure. In 2020, the combined value of venture-backed private companies exceeded $2 trillion, having grown at more than 40% compound annual growth rate over the prior decade, according to Pitchbook data.
Nico Sand, Chief Executive Officer at Zanbato, commented: “We’re pleased that J.P. Morgan shares our commitment to creating deeper and more reliable private markets. We look forward to continuing to build out ZX, further enabling our members to more effectively serve their clients.”
Andrew Tuthill, Global Head of Equities Private Markets, J.P. Morgan, said: “Our strategic investment in Zanbato complements our commitment to support clients across the private market ecosystem, as we look to leverage tech-enabled platforms to source liquidity and increase execution speed.”
Zanbato’s mission is to make private markets more liquid and reliable with a little help from its inter-broker platform ZX platform. ZX is an SEC-registered Alternative Trading System and is specialized in trading venture-backed private shares, with already over 100 banks and brokers as clients for price discovery, liquidity, and trade execution services.
The need for private stock trading platform has grown proportionally to the increased amount of time companies stay private instead of going public via IPO. Most ZX members saw record levels of private stock trading last year.
Many startups have built stock markets for private companies throughout the years. In 2018, The Industry Spread reported on Equidate’s $50 million fundraiser in a Series B financing round led by FT Partners, Panorama Point Partners, and Operative Capital, who joined existing investors such as Peter Thiel, Tim Draper, and Scott Banister.
Equidate was founded in 2014 and is specialized in facilitating the trading of private technology companies’ shares. The firm connects individual and institutional investors with sellers like venture capitalists and shareholder-employees, as well as some of the largest and most prominent private companies themselves.