US lender JPMorgan Chase & Co. on Monday announced an expansion of its operations in Israel with the provision of commercial banking services to local startups and high-tech companies.
The US bank said that it has hired a new 10-person banking team led by Darya Fuks, previously head of corporate development at software company Wix and a former JPMorgan investment banking executive.
The new team, which is part of JPMorgan’s Innovation Economy banking division, will cater to Israel-based high-growth companies, startup founders and the venture capital community in the so-called innovation economy, in industries such as disruptive commerce, technology, life sciences, healthcare IT and climate tech.
JPMorgan said that the new Israel team will provide startups with support on their journey toward an initial public offering and offer capital raising solutions. It will also supply basic services such as payments, financing, cash management solutions and strategic advice for venture capital firms and their portfolio companies.
“Israel is a recognized world leader in producing and nurturing companies in the Innovation Economy, and I’m thrilled to be returning to JPMorgan to support this critical sector and serve clients that are advancing economic growth and sustainability,” said Fuks, who was named managing director and Israel commercial banking head of innovation economy at JPMorgan.
JPMorgan has been working with Israeli businesses since the 1960s and opened its first office in the country in 2000. Its financial services in the country include investment banking, asset management, private banking and treasury and securities services, and now commercial banking.
The US lender’s expansion comes as some Israeli tech companies are considering moving their operations and new startups are seen incorporating their businesses abroad amid uncertainty around the advancement of the proposed overhaul to weaken the judicial system.
“JPMorgan is committed to supporting Israeli businesses, so growing our local footprint and deepening what we can offer clients and individuals in our community is a powerful next step in our story here,” said JPMorgan CEO Israel Roy Navon.
JPMorgan will be tapping into the growing venture lending market as startups and tech companies in Israel and abroad are increasingly looking to diversify their financing avenues and sources of credit lines following the collapse of Silicon Valley Bank Financial Group earlier this year and the downturn in global financial markets. SVB served as the lender of choice to many Israeli startups and technology companies.
Tech companies are grappling with a steep downward slope in investments after global stock market volatility brought rising valuations down and the specter of an economic slowdown and a regime of higher interest rates hampered deal flow.
In the first quarter of this year, Israeli tech companies raised $1.7 billion in venture capital, down 70% from $5.8 billion in the first three months of 2022, according to a report by IVC Research Center and LeumiTech. The quarter marked the lowest figure in four years.
Israel is the 26th country where JPMorgan has expanded its commercial banking business to outside of the US since 2019. Since then, the US lender’s team has grown to hundreds of bankers, serving more than 650 companies. In May JPMorgan bought the assets and deposits of San Francisco-based First Republic, the third midsize bank to fail in two months.
“We’re excited to continue our international expansion journey by entering into strong markets like Israel,” said JPMorgan head of corporate client banking international Andrew Kresse. “We see a lot of opportunity to make an impact here, and we have proven that we can help local companies grow their businesses on the global stage.”
Last week, HSBC Holding plc announced that it is taking over senior bankers of SVB Israel and is adding more than 20 new bankers in the country to position itself as bank for local venture capital firms and startups. David Cohen, former general manager of SVB Israel, was hired as managing director in HSBC’s Israeli business, responsible for helping tech and healthcare companies in Israel grow in international markets. In March, HSBC bought the UK arm of SVB.
Earlier this month, BlackRock, the world’s largest asset manager, snapped up British-Israeli Kreos Capital, a provider of loans to Israeli and European startups, for an undisclosed sum.