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To fill the void created by SBV’s sudden demise, JP Morgan is hiring dozens of bankers, including more than a few former SVB alumni. Which only makes sense if you think of it.
Move over SVB
SVB was possibly the biggest player in funding and servicing startups, especially in tech. At its peak before its implosion last March, the bank managed roughly $9 billion among 800 unicorns.
“It’s a very rare thing to have this monopolistic player go away overnight,” Doug Petno of JPMorgan told the Financial Times. With SVB out of the picture, JPMorgan is looking to take over the mantle:
- JPMorgan has added roughly 20 new bankers to its offices in the UK in addition to the 10 it hired in Israel. This includes former SVB executives Rosh Wijayarathna and Folake Shasanya, who will serve as managing directors in the UK and Ireland. The bank also brought on John China, a 27-year veteran, as co-head of its innovation economy business in the US.
- This might be rough timing, as funding in startups has been pretty paltry lately. According to preliminary Crunchbase data, Q2 saw investors put only $31.8 billion into seed- through growth-stage rounds for US and Canadian startups, the lowest quarterly total in three years. Not only that, overall deal volume has fallen 35% year-over-year.
Got the Money to Burn: JPMorgan is no stranger to poor investments and bouts of shoddy risk management. It acquired college financial planner Frank for $175 million in 2021. Frank CEO Charlie Javice said the service was used by more than 5 million customers — but it was really less than 300,000. Even more destructive was the infamous 2012 “tempest in a teapot” fiasco when the bank’s chief investment office cost JPMorgan more than $6 billion after bad bets on credit derivatives. JPMorgan manages more than $2.5 trillion in assets, so it can probably survive losing a few billion dollars and the occasional congressional grilling.