- Andreessen Horowitz-backed startup OpenInvest just released Portfolio Diagnosis, a platform which allows investors to understand the social impact their investments.
- For example, investors can learn about the amount of carbon emissions they’ve saved and how that translates to trees planted. Or, if they wish, they can ensure they are not investing in companies that support the politically divisive National Rifle Association.
- OpenInvest was co-founded by two former Bridgewater Associates hedge funders and is backed by Andreessen Horowitz and Y Combinator.
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Andreessen Horowitz-backed fintech startup OpenInvest is making it easier for investors to measure the impacts of their social or sustainable investments — down to the number of trees or carbon emissions they’ve saved.
The product, called Portfolio Diagnosis, will allow registered investment advisors — the people who help rich people manage their portfolios — more concretely describe the social impact specific investments will deliver.
Its release comes at a ripe moment: more investors now want to understand the social implications of their investments, a field known in the industry by the term, environmental, social and governance (ESG). The trend is particularly hot among wealthy millennials — 95% of whom are interested in sustainable investing, according to a 2019 Morgan Stanley survey.
The company was co-founded in 2015 by two ex-Bridgewater Associates hedge funders Conor Murray and Phil Wei. Murray is now CEO of OpenInvest and Wei is the CTO.
Murray said the grand idea is to build a whole new class of what he called “active-passive” investors who align their portfolios with their values without sacrificing on market performance, he told TechCrunch’s Jonathan Shieber.
From carbon emissions to the NRA
So, for example, Portfolio Diagnosis can show investors how their investments translate into the number of trees planted through reductions in carbon emissions. Or it can help them ensure their money was not spent on corporations that support the politically divisive National Rifle Association.
OpenInvest’s scoring system analyzes billions of data points from in-house research, public reports, and industry experts, looks for the progress on diversity initiatives and supply chains and so on to determine this information.
OpenInvest did not disclose the fee for using the platform, or the number of registered investment advisors on the platform, to Investment News’ Nicole Casperson. But the startup manages around $55.4 million in assets and works with more than 520 retail clients, Casperson reported.
OpenInvest has raised over $24 million in Series A funding, according to Crunchbase from backers including Andreessen Horowitz and Y Combinator.