The US investment bank said on Thursday it had signed a deal to buy Nutmeg, one of the UK's best-known fintech startups, and fold it into its soon-to-be-launched Chase app in the UK.
“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," said Sanoke Viswanathan, CEO of International Consumer at JPMorgan Chase.
"We look forward to positioning their award-winning products alongside our own, and continuing to support their innovative work in retail wealth management."
Read more: JPMorgan to launch UK digital consumer bank
Nutmeg was founded in 2012 as a digital-only wealth manager and was part of a wave of fintech startups taking on the financial establishment.
Currently, Nutmeg manages £3.5bn ($4.9bn) on behalf of 140,000 clients in the UK. The company offers pensions services, ISAs, and managed portfolios of stocks and bonds. JPMorgan said Nutmeg's assets grew by 70% last year alone.
"Nutmeg’s customers can expect the same level of transparency, convenience and service that helped make us a leading digital wealth manager in the UK," chief executive Neil Alexander said in a statement.
"I am truly impressed with the digital experience that Chase is building for the UK, and this new chapter in our story will see Nutmeg’s customers benefit from a wider range of products and services in the future, and allow us to expand into new markets.”
Alexander will stay on as chief executive after the sale and Nutmeg customers won't notice any immediate difference. JPMorgan said it has not taken any decision on whether to retire the brand or roll it into the Chase brand.
The splashy deal comes as JPMorgan prepares to launch into the UK retail banking market later this year. The American banking giant said earlier this year that it plans to launch its Chase brand as a digital challenger. A current account will be the first product to launch but the bank will lean on Nutmeg's technology and expertise when it comes time to offer investment products. In an email to customers, Alexander said Nutmeg would "form the bedrock of the bank’s retail digital wealth management offering outside of the United States over the long term".
In Britain, JPMorgan's Chase will compete with arch rival Goldman Sachs' (GS) Marcus savings account, as well as new digital-only challengers like Monzo, Revolut and Starling, and traditional lenders such as Lloyds (LLOY.L) and Barclays (BARC.L).
Terms of the Nutmeg acquisition were not disclosed. The deal is expected to close later this year subject to regulatory approval.
Disclosure: The author is a Nutmeg customer
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