Breaking

2021: J.P. Morgan agrees to acquire OpenInvest, a pioneer in values-based investing FUNDING: ~$27.3M raised from Y Combinator, Andreessen Horowitz & QED STRUCTURE: One of the only VC-backed Public Benefit Corporations PRODUCT: Tilt portfolios toward decarbonization, diversity, ethical supply chains FOUNDED: San Francisco, 2015 2021: J.P. Morgan agrees to acquire OpenInvest, a pioneer in values-based investing FUNDING: ~$27.3M raised from Y Combinator, Andreessen Horowitz & QED STRUCTURE: One of the only VC-backed Public Benefit Corporations PRODUCT: Tilt portfolios toward decarbonization, diversity, ethical supply chains FOUNDED: San Francisco, 2015

Company Profile // Fintech // ESG

OpenInvest & the values you can actually buy

The San Francisco startup that turned "invest according to my conscience" from a brochure slogan into a product with buttons - and then sold the whole thing to the biggest bank in America.

Caption A logo the size of a thumbnail, from a company that thought about capital at the scale of the planet. OpenInvest spent six years arguing that your portfolio could hold an opinion. J.P. Morgan eventually agreed, in writing.

Values-Based Investing A J.P. Morgan Company Public Benefit Corp

The Pitch

A company built on a slightly annoying question

Here is a question that sounds simple and turns out to be enormously complicated: what, exactly, do you own? If you have money in a broad index fund, the technically correct answer is "a little piece of almost everything," which is convenient right up until you decide there are a few things in "almost everything" you'd rather not own. Maybe it's companies clearing rainforest. Maybe it's supply chains you find ethically unappealing. The traditional financial system's answer to this was, roughly, a mutual fund with a leaf on the brochure and a fee to match.

OpenInvest, founded in San Francisco in 2015, decided this answer was insufficient. Its founders looked at socially responsible investing - a category that had existed for decades mostly as marketing - and concluded that the actual problem was software. If you could hold individual stocks instead of a fund, and if you had a system smart enough to rebalance them for you, then "align my money with my values" stops being a vague aspiration and becomes a set of toggles. Fight deforestation: on. Reduce carbon exposure: on. Tilt toward workforce diversity: on. The portfolio does the rest.

What You Can Actually Do With It

Values, unbundled into features

The clever bit of OpenInvest was treating causes the way an engineer treats configuration. Instead of buying one fund labeled "ESG" and hoping it matched your beliefs, you could mix and match. Below is the flavor of what the platform let advisors and clients express - and then, crucially, measure and report on.

Decarbonization

Deforestation-free

Workforce diversity

Ethical supply chains

Impact reporting

Illustrative of the platform's cause categories, not a performance figure. The point is customization: each tilt is a lever, not a separate product.

The Product

Four things it did well

Customization

Values-based portfolios

Advisors and clients tilt holdings toward or away from specific causes - down to the individual position - rather than accepting a one-size-fits-all fund.

Transparency

Automated impact reporting

Sophisticated, personalized reports show clients the measurable ESG effect of their portfolio. The boring PDF became living software.

Distribution

The advisor platform

Direct-indexing-style tooling delivered to registered investment advisors so they could offer low-cost, customized ESG portfolios at scale.

Scale

Inside J.P. Morgan

Post-2021, the technology powers values-based investing and impact insights within J.P. Morgan's Private Bank and Wealth Management.

The Founders

An unusually well-matched trio

Good founding teams tend to be weird combinations of people who would not otherwise share an office. OpenInvest paired someone who built the machinery of Wall Street with someone who spent years arguing that Wall Street was pointed the wrong way.

Conor Murray

Co-founder & CEO

MIT math and computer science. Went from investment banking at Morgan Stanley to Bridgewater Associates, where he ran technology optimizing investments across funds totaling more than $150 billion.

Joshua Levin

Co-founder & CSO

Over a decade in sustainable finance, including six years at the World Wildlife Fund running its Sustainable Finance Program. BA from Harvard, MBA from NYU Stern.

Philip Wei

Co-founder

Rounded out the founding team that took OpenInvest through Y Combinator and built the engineering behind customizable, reportable ESG portfolios.

The Interesting Part

The Public Benefit Corporation that took venture money

Now here is where it gets genuinely interesting, and a little bit funny. OpenInvest was structured as a Public Benefit Corporation. This is a legal form that obligates the company to weigh a social mission alongside profit - which is a lovely thing to put in your charter and a slightly awkward thing to explain to venture capitalists, whose entire business model is the pursuit of profit at velocity. OpenInvest did both anyway. It raised from Y Combinator, from Andreessen Horowitz, from QED, and it kept the benefit-corporation structure. It was, as it liked to point out, one of the only VC-backed Public Benefit Corporations in existence.

The tension you'd expect - mission versus money - mostly didn't materialize, because OpenInvest's whole thesis was that the two weren't actually opposed. The pitch wasn't "sacrifice returns to feel good." The pitch was "the tradeoff between values and returns is smaller than everyone assumes, and we have the tooling to prove it." That is a much more investable claim, and it turns out to be the kind of claim large banks find interesting once enough of their clients start asking about it.

So in June 2021, J.P. Morgan - a firm that manages trillions and does not typically buy things for sentimental reasons - announced it would acquire OpenInvest. It was the bank's third fintech acquisition in about a year, alongside the tax-optimization firm 55ip and the UK robo-advisor Nutmeg. Of the three, OpenInvest was the smallest by headcount and arguably the biggest tell about where wealth management is heading. The bank said OpenInvest would keep its brand and slot into the Private Bank and Wealth Management businesses. The startup that built values-into-a-feature was about to get the one thing it lacked: distribution to millions of portfolios.

Timeline

How it happened

2015
Founded in San Francisco by Conor Murray, Joshua Levin and Philip Wei; goes through Y Combinator.
2015 - 2020
Builds the automated values-based investing platform and impact-reporting engine; raises from Y Combinator, Andreessen Horowitz and QED (~$27M total).
June 2021
J.P. Morgan announces a definitive agreement to acquire OpenInvest, "a pioneer in values-based investing."
Q3 2021
Acquisition closes; OpenInvest retains its brand and integrates into J.P. Morgan's Private Bank and Wealth Management.

Who It's For

Advisors first, values-driven clients second

OpenInvest was never really a consumer app you'd download on a whim. It was infrastructure - technology sold to financial advisors, registered investment advisors and wealth managers so they could offer customized ESG portfolios to their clients without building the machinery themselves. The end beneficiary was the investor who wanted their money to reflect their beliefs and to see, in plain language, what that money was actually doing.

After the acquisition, that audience got a great deal larger. Sitting inside J.P. Morgan's Private Bank and Wealth Management, the technology now serves the bank's high-net-worth clients, which is a polite way of saying the "mainstream values-based investing" mission that OpenInvest wrote into its charter got a very large megaphone. The competitive neighborhood - firms like Ethic, Just Invest (bought by Vanguard) and Aperio (bought by BlackRock) - tells you the same story from a different angle: nearly every major asset manager decided customized, values-aware portfolios were a capability worth owning, not building.

Footnotes Worth Keeping

Four things that stick

Pedigree

CEO Conor Murray previously ran technology at Bridgewater that optimized investments across more than $150 billion in funds.

Conservation

Co-founder Josh Levin spent six years at the World Wildlife Fund running its Sustainable Finance Program before co-founding the company.

Structure

A Public Benefit Corporation, legally bound to weigh mission alongside profit - while still raising venture capital.

Context

J.P. Morgan's third fintech acquisition in roughly a year, after 55ip and Nutmeg.

Go Deeper

Website, socials & press

Websiteopeninvest.com LinkedIn/company/open-invest Twitter / X@openinvestco Facebook/openinvestco Y CombinatorCompany page CrunchbaseFunding profile PressJ.P. Morgan acquisition At J.P. MorganValues-based investing CoverageCNBC report

Sources: J.P. Morgan Chase newsroom, PR Newswire, ESG Today, CNBC, Systemiq, Y Combinator, Crunchbase, Craft.co and OpenInvest's own materials. Funding and headcount figures are approximate and drawn from public records. OpenInvest retained its brand as "a J.P. Morgan company" following the 2021 acquisition.