Incumbent Banks Threaten Zanbato

The biggest threat to Zanbato is that the largest banks can turn distribution into control. Zanbato wins today because institutions already trade private stock through broker-dealers on ZX ATS, but that same setup means a bank that already owns the client, the balance sheet, and the compliance team can either build similar workflow in house or buy a platform and keep more of the fees, data, and order flow for itself.

• Zanbato is deeply embedded in bank workflows already. J.P. Morgan was a strategic investor in Zanbato in February 2021, and institutions access Zanbato through their existing brokers, with ZX now serving over 220 trading groups and processing $185B plus in ticket volume since 2017. That makes banks both key partners and the most credible future acquirers or internal builders.
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• This market has a history of incumbents absorbing the independent layer once the model is proven. SecondMarket was acquired by Nasdaq. More recently, large wealth and brokerage firms have moved to buy private market infrastructure, including Schwab with Forge and Morgan Stanley with EquityZen, showing that owning the rails is becoming strategically important.
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• Private share trading is still not a simple exchange business. Trades need broker relationships, issuer approvals, pricing data, compliance checks, and long settlement coordination. That complexity favors firms that already have huge broker networks and operations teams, which is why independent platforms compete less on code alone and more on who controls liquidity and distribution.
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The market is heading toward fewer standalone marketplaces and more private market infrastructure living inside large financial institutions. For Zanbato, the durable path is to become hard to replace as the neutral network and data layer across many brokers, because once a single bank can offer enough liquidity on its own, the value of an independent marketplace starts to compress.