Right: fuelling startups with the right kind of financing will boost growthLeft: the question of when – and how – to
go global is one every startup will faceWIRED PARTNERSHIP | J.P. MORGANyear on year versus 2019,” he says,
though some of that increase is down
to the cyclical nature of the business.
There’s no rush to go public,
though. “What’s really interesting is
that companies are staying private for
twice as long as they used to,” says
Gregson. And that’s what’s led to so
many so-called “unicorns” – companies
valued at more than a billion dollars, with
72 in the UK alone over the past two
decades. “We’ve been holding our own.”
And startups remaining private for
longer changes how investment works
in the sector. “A lot of the value creation
is coming earlier in the life cycle when
these companies are private,” Gregson
explains. “That’s why you’ve seen a really
interesting investment sector build up,
because the publicly listed tech stocks
are not necessarily where value is being
created the most.” That’s increased the
importance of private investment oppor-
tunities, venture capital and growth
equity funding, with J.P. Morgan leading
a half-billion dollar growth funding round
for Deliveroo, he notes. “That was about
helping with expansion capital, and it
still remains a private company.”
Regardless of which route a company
takes to scale from local London startup
to large player, financial partners with
expertise is key. It’s not just about
IPOs and M&As, but if you’re growing
globally, you’ll need banking in dozens
of countries, and be able to accept a
myriad of currencies. J.P. Morgan is a
bank, but it’s one that employs 53,000
software engineers, coders and technol-
ogists, Gregson notes, pointing out that
technology is part of the company’s
heritage: “We funded Edison way back
when, and the first transatlantic cable.”
And choosing the right financial
partner isn’t about how much funding
you’ll get up front. “It’s not all about
who’s going to give you the highest
valuation in your Series A round,” says
Matthew Gehl, head of technology at
J.P. Morgan Investment Bank. “You
can get some pretty onerous terms...People think only about the headline
valuations and not about whether they’re
the right investors who are going to
support you for the long term.” Gehl
says with so much more capital being
raised privately, banks are changing
how they engage. Led by J.P. Morgan,
banks now partner with startups much
earlier in their life cycles, which includes
raising private rounds of funding. “We
want to be with them all the way through
the journey, not just at the IPO – that’s
the old mentality of banks,” says Gehl.
Gregson builds on the point of being
joined up, “Our value is in our global
integrated coverage across the Private
and the Investment Bank. It allows our
clients to leverage our experience and
outreach in advising disruptive, high
growth technology companies as well
as seamless execution from a trans-
action perspective. We are long-term
partners helping companies through
critical phases of growth and devel-
opment across the private and
public capital markets globally.
To find out how J.P. Morgan can support
your business, visit jpmorgan.comto vital resources, support networks,
workspaces, mentoring, networking,
collaboration and all of the obvious
financial services,” Gregson says.
For those startups that survive, it’s
time to consider what’s next – be it
scaling or expanding globally, selling
privately or going public – in the
evolution from disruptive startup to
meaningful, impactful business.
The IPO environment remains
strong in terms of dollar amounts, says
Gregson, but that’s down to specific,
big deals, he adds. “If you look at 2019
versus 2018, tech IPO issuance is up in
the region of 80 per cent, and the trans-
action value of IPOs is also up strongly‘We try to deliver access
to vital resources’ -
Oliver Gregson
Head of UK and Ireland11-19-PRJPMorgan.indd 51 18/09/2019 15:10