JPMorgan Chase said Monday it put $5 billion into young companies in the inaugural year of its security and resiliency push, outpacing its own expectations. The firm had outlined a 10 year, $10 billion startup plan, and co President Doug Petno told CNBC the bank could take it beyond that initial figure.
Jamie Dimon launched the initiative a year ago after wars in Ukraine and the Middle East, along with trade disputes with China, jeopardized supplies of energy and critical components needed by U.S. industry and defense. He asked Petno to oversee the broader effort. Todd Combs, a former Berkshire Hathaway executive and former board member of JPMorgan who now reports directly to Dimon, runs the team making startup investments. Petno said Combs has "hit the ground running," adding, "He's done a great job and put us in some really interesting companies."
Many holdings remain under wraps, but the country's largest bank by assets has revealed direct stakes in Hadrian and Castelion as examples of the strategy. In August, JPMorgan helped lead a $1.4 billion round for Hadrian, which builds automated plants that produce parts for defense, aerospace, and maritime customers. According to the company's founder, a Hadrian plant in California operates at a ratio of 10 robots per human worker.
Also in August, the bank joined a $1 billion financing for Castelion, whose main offering is a relatively low cost hypersonic missile called Blackbeard. Castelion traces its origins to late 2022, when a team of former SpaceX engineers started the company. "Our approach is to find generational companies and partner with them for the long term," Combs said Monday. "Putting more than $5 billion to work in our first year shows how many exceptional businesses are building in industries that strengthen critical supply chains."
Petno added, "There's a lot of really interesting companies that have been working to solve some of these problems," noting that early venture stage advanced manufacturers are building capabilities in the U.S. rather than leaning on overseas partners.
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Direct startup stakes mark a turn for a bank better known for lending and advice. Before this push, JPMorgan had stepped back from venture-style investing and executed a spinout more than a decade ago of its private equity unit, One Equity Partners. Dimon also tapped Petno - often cited as one of two leading succession candidates - to oversee the entire investment initiative.
Beyond equity, JPMorgan says it has provided and arranged over $230 billion for industries tied to American national interests. That financing stream aims for $1.5 trillion over 10 years and is headed by Jay Horine, a former co head of investment banking. The bank assembled a team of about three dozen bankers, supported by hundreds more across the firm, expanded the program into Europe and Canada, and tasked its bankers with charting supply routes for products including submarines, missiles, and aircraft, aiming to spot vendors potentially short on funding or production ability as demand increases; the firm is in regular contact with the U.S. Department of Defense and Department of Commerce about needs.
The remit extends past supply chain, defense, and manufacturing to encompass frontier technologies, plus pharmaceutical and health tech firms.
For your portfolio, the signal is that a major bank is pairing early stage equity with large scale financing aimed at national security and industrial capacity. If the startup plan grows past the original $10 billion, the pipeline of defense, advanced manufacturing, and supply chain names coming to market could get deeper as more deals surface.
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