JP Morgan is investing in J2 Ventures, the first veteran-led venture capital firm supported by the bank’s initiative to close a funding gap for managers in underrepresented communities.
J2 Ventures specializes in early-stage funding of companies with dual-use technology in artificial intelligence and machine learning, health care, and materials science. The technology is designed for use both by government agencies and the commercial sector, and JP Morgan’s interest in the firm is tied to its ability to sell to both.
“If you agree that every venture capitalist wants to find the next great thing, then working with government is actually very advantageous,” said Alexander Harstrick, a co-founder of J2 Ventures, in an interview.
The JP Morgan initiative, Project Spark, was launched in 2021 and is committed to providing $140 million in capital to VC funds run by minority-led, women-led, and veteran-led managers. The project’s investment committee, made up of executives from the bank’s asset management sector, has so far chosen 17 VC funds to invest $69 million.
The Project Spark Investment Committee is “encouraged by J2’s ability to navigate applicable, non-dilutive capital from US government programs,” chairwoman Jamie Kramer said in a statement for Bloomberg Government.
“Dual-use investing is really something that is less than a decade old and really only matured in the last couple of years,” Harstrick said.
Harstrick said he sees
Among the companies J2 Ventures invests in are Oura, which makes a wearable tracker, and Tasso Inc., which developed blood collection technology, Harstrick said.
Oura has been used in Defense Department studies for detecting infection and health monitoring. Tasso now works with the Department of Veterans Affairs following research funded by the Defense Advanced Research Projects Agency.
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Successful commercial technologies originally developed to address federal agency needs or problems include the internet, electric vehicles, GPS, and autonomous robots. Historically, the US government has funded research on breakthrough technology through DARPA or the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.
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Harstrick praised JP Morgan’s focus on underrepresented managers and diversity among attendees at Spark events, such as the inaugural Spark Connect summit in October.
“I can’t think of a time in startups or venture ever where that is the case,” he said. “JP Morgan is creating that ecosystem.”
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