The US bank has led a US$5m series A funding round to drive the index provider’s international expansion and accelerate platform development.

MerQube has completed a Series A funding round led by J.P. Morgan alongside venture investing firm ThirdStream Partners, hedge fund managers Benjamin Smith and Sheehan Maduraperuma, co-founders of Laurion Capital Management, and several other financial market professionals.

“As we build our platform, we have started to get traction with clients that believe in our vision,” Vinit Srivastava (pictured), CEO at MerQube, told SRP. “It is very important for a new business to have the support of the market. Getting the support of J.P. Morgan as a minority investor in this equity round is a validation of the fact that we are on the right track, and that some of the trends that we thought would play out, are playing out.

“The investment is needed to grow this business both in terms of size and scale. We have now the support from very prominent investors from the investment banking space, but also from the asset management space including ETF and hedge fund providers, and fintech."

Jason Sippel (right), head of global equities at J.P. Morgan, said the investment underscores J.P. Morgan’s focus on investable indices and structured products.

“Globally, our clients are looking for exposure to ever more agile index strategies. J.P. Morgan’s collaboration with the MerQube team will further enhance our work to deliver market-leading, next generation index solutions,” he said.

MerQube has previously raised US$2m in its seed rounds in August 2019 and October 2020, with historical investors.

The index firm is seeking to capitalise on the evolving US$15 trillion index-linked investing market shift from simple market-capitalization based equity indices 20 years ago to multi-asset strategies.

According to Srivastava, recent demand is driving increased customisation with the rise of more complex strategies, such as defined outcome ETFs.

“There are certain gaps that index providers traditionally have not addressed some relate to technology, but also to product development. There is prospect for growth in the indexing space as it transitions from the market cap one-size-fits-all set up to a more customised approach.,” he said.

MerQube will use the funding round to accelerate its momentum through expansion into key markets such as Europe, platform development and scaling up its workforce, in particular with further key hires from the technology and financial industries.