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Fennel, an ESG-focused investment app, raises $5M

Megan Hernbroth
Illustration of an earth app icon with a notifications symbol that says "$"

Illustration: Allie Carl/Axios

Startup app Fennel raised $5 million on its pitch to make ESG investing and shareholder engagement easier for retail investors.

Why it matters: ESG investing is under fire from conservative camps, but the investment area continues to pull inflows from younger investors eager to build a portfolio of companies focused on climate change and diversity, equity and inclusion.

Details: Fennel raised the seed funding via an all-equity party round that included UC Davis professor John Rundle, Acorns co-founder Jeffrey Cruttenden and former Schwab board member Preston Butcher, among others. None of the round's investors are joining Fennel's board, CEO Daniel Naim tells Axios.

State of play: Naim dropped out of his Ph.D. program to start Fennel in 2020. By May of this year, the market had soured on fintechs.

  • "It was hell," he said of the fundraising environment.

How it works: Fennel operates in two forms, Fennel the app via Fennel Markets and Fennel the brokerage, called Fennel Financial, which is a subsidiary of Fennel Markets and offers securities.

  • The subscription-model app allows users to buy and sell public securities and get a detailed look at their portfolio's ESG metrics in data.
  • The app also allows users to follow proxy ballots to track their outcomes and it plans, in the future, to offer voting capabilities.
  • Fennel Financial is a separate entity that directs the customer order flows does not accept payment for order flow. This arm of the company works with Apex for custody and clearing, Aventis for AML, and Socure for KYC.
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