Serious About Expansion? JPMorgan Makes Its Third Fintech Acquisition In A Year

JPMorgan, the biggest bank in the United States by assets, is expanding its market by acquiring more companies in the fintech sector. The bank is set to complete the acquisition of OpenInvest, a San Francisco-based start-up.

JPMorgan to Buy OpenInvest

JPMorgan Chase has agreed to acquire OpenInvest, a San Francisco-based start-up backed by VC firm Andreessen Horowitz and founded by former Bridgewater Associates employees. This latest development continues the bank’s latest tradition of buying fintech companies.

The acquisition of OpenInvest is JPMorgan’s third acquisition of a fintech start-up in six months. The bank acquired 55ip, a firm that automates the construction of tax-efficient portfolios, in December 2020 and followed that with the acquisition of UK-based robo-advisor Nutmeg earlier this month.

Last year, JPMorgan CEO, Jamie Dimon, pointed out that the bank will be more aggressive towards searching for potential acquisitions. The acquisitions would enable banks such as JPMorgan to compete with some of the leading fintech companies, such as PayPal and Square, which have been gaining popularity globally.

Similar to the Nutmeg deal, JPMorgan didn’t disclose how much it would be acquiring OpenInvest. However, the bank said OpenInvest would help its financial advisors customize clients’ investments in ESG, a category that comprises environmental, social and governance factors.

JPMorgan interested in ESG funds

JPMorgan is focusing on ESG due to the rapid growth in the sector. So far this year, ESG funds have attracted massive investments, bringing the total global assets under management to almost $2 trillion.

Mary Callahan Erdoes, CEO of JPMorgan’s asset and wealth management division, said, “Clients are increasingly focused on understanding the environmental, social, and governance impact of their portfolios and using that information to make investment decisions that better align with their goals.”

With OpenInvest, JPMorgan can allow its clients to create highly personalized, dynamic values-based portfolios. This will grant them exposure to ESG investment funds provided by the financial institution.

JPMorgan’s stock price is up by less than 1% at Tuesday’s pre-market trading session. Year-to-date, the stock has performed excellently, rising by 22.61% to trade above $154 per share currently.