Investors are increasingly looking at more than a company’s finances when deciding where to put their money.
In 2020 alone, environmental, social and governance (ESG) investments grew to $35 trillion, up from $30 trillion in 2018, according to Bloomberg.
A Twin Cities entrepreneur is seeking to capitalize on this movement with a new fintech platform he says brings value-focused ESG data sets to the market.
In 2019, Luke Wilcox, a data consultant, started Ethos, a Minneapolis tech company through which he would build a data system that provides investors with information to help gauge how well their portfolio impacts social issues that matter to them.
Wilcox’s assumption was investors, like him, want to know if their money is helping companies that care about saving the environment, closing gender pay gaps or making the labor force more diverse.
If investors are solely focused on the bottom line, Wilcox also assumed they would want to know if a controversial event increased any financial risk.
Since launching the company, 75 financial services and wealth management firms across the U.S. and Australia have subscribed to the Ethos platform for their clients, Wilcox said. In December, Ethos closed on $550,000 in a seed round from private investors to grow the business, and he plans to raise more capital from investors this year.
This year, Wilcox is anticipating $300,000 in annual recurring revenue.
In the Ethos platform, firms upload information about which social issues matter most to a specific client. The information helps financial advisers design a portfolio aligned with a client’s causes, or it can show how well aligned a client’s investments already are with those values or causes.