JPMorgan deepens wealthtech push by leading raise in investment analytics fintech

The news: The financial institution led a $50 million round in Aumni, per the fintech’s press release.

Why invest in Aumni? The raise highlights JPMorgan’s interest in financial analytics tools that digitally enhance its capital markets investing.

Aumni lets clients, including venture funds and family offices, access deeper insights into their private market investments. Its venture attorneys audit every document in clients’ portfolios while its proprietary AI platform analyzes hundreds of data points per closing set. It plans to use the funding to enter new customer segments, like company founders.

These tools are set to become increasingly valuable for firms like JPMorgan that want to boost investor satisfaction as capital markets investing becomes increasingly popular. High-net-worth customers are expected to allocate an additional 5% of their wealth to private market assets—representing $1.5 trillion in AUM—by 2025, and institutional investors like pensions are also pouring into the private market.

JPMorgan’s wealthtech push: JPMorgan went on an investing and acquisition spree this year to accelerate its digital transformation in wealthtech.

The pandemic increased digital channel use in wealth management, and a race to the bottom on fees coupled with the demographic shift to younger and more tech-savvy clients magnified FIs’ need to acquire better tech capabilities, per an Insider Intelligence report.

JPMorgan is flexing its financial muscle to invest in and acquire fintech solutions outright and circumvent the challenges of building solutions in-house.

• Earlier this year, it led a $22 million raise in Tifin, a holding company that operates wealthtech subsidiaries.
• And just this summer, it acquired analytics provider Openinvest to help wealth managers measure the tangible impact of their client portfolios against ESG factors.
• It also purchased robo-advisor Nutmeg in the UK to secure a foothold in the UK retail investing market: The fintech has more than 140,000 clients and £3.5 billion ($4.49 billion) under management.

We expect JPMorgan to redouble its wealthtech investing and acquisitions in H2 thanks to the firm’s well-funded war chest: It reported record profits in Q2 and released $3 billion in reserves that had been set aside to cover potential pandemic losses that didn’t materialize.

For a deeper dive: Here’s our take on why FIs are getting their hands on innovative capabilities through acquisitions and strategic investments rather than building their own digital offshoots.