JP Morgan wades into the UK savings market as it snaps up online wealth adviser Nutmeg in a £700m deal
Online wealth adviser Nutmeg has been snapped up by JP Morgan as the Wall Street titan wades into the UK savings market.
JP Morgan declined to reveal how much it had spent on the nine-year-old firm, but it is understood the deal values Nutmeg at around £700million.
Founders Nick Hungerford, a former stockbroker, and tech entrepreneur William Todd will rake in several million pounds through the deal.
UK foothold: Wall Street titan JP Morgan declined to reveal how much it had spent on Nutmeg, but it is understood the deal values the online wealth advisor at around £700m
Sir Victor Blank, the former chairman of Lloyds Bank during the financial crisis, was an early backer and is likely to make a generous return.
So will more than 2,000 individual investors who ploughed almost £4million into Nutmeg through online platform Crowdcube in 2019.
Crowdcube’s chief executive Darren Westlake said the sale had made a ‘very healthy return’ for those investors, and the deal looked set to be the largest amount returned after a raise on the platform.
Venture capital firms including Balderton Capital and Pentech Ventures, asset manager Schroders, Taiwanese bank Taipei Fubon, the investment arm of Goldman Sachs, and Hong Kong’s Convoy will also cash in.
Nutmeg, known as a ‘robo-adviser’, asks savers a set of questions through its website or mobile phone app to judge their risk appetite.
It then automatically invests their money into funds which track stock market indices like the FTSE 100. Because it relies on technology, and ploughs savers’ money into ‘tracker’ funds, its fees are much lower than those charged by traditional wealth managers.
Nutmeg looks after more than £3.5billion of savers’ money, and has more than 140,000 customers. But it has never made a profit – in 2019, the last year for which it filed accounts, it was £21million in the red.
Even so, JP Morgan is hoping Nutmeg will give it a strong foothold in the UK as it looks to expand its consumer banking brand – Chase.
Robo-advisers have typically had to burn through money to attract customers, and now JP Morgan will acquire all of that work by snapping up Nutmeg.
The US bank plans to launch a range of products in Britain, starting with a ‘new take on current accounts’, which is in its testing phase.
Sanoke Viswanathan, chief executive of the international consumer bank at JP Morgan, said: ‘We are building Chase in the UK from scratch using the very latest technology and putting the customer’s experience at the heart of our offering, principles that Nutmeg shares with us.
‘We look forward to positioning their award-winning products alongside our own, and continuing to support their innovative work.’
JP Morgan said Nutmeg customers would be unaffected by the deal, but that it would be deciding whether to rebrand the robo-adviser under the JP Morgan or Chase brands.