Aspiration Partners Inc., an online investment service that lets customers decide how much to pay in fees, has raised $15.5 million.
The Los Angeles start-up announced Thursday that Chinese social media company Renren, GSV Capital, Capricorn Investment Group and IGSB provided the funding. Aspiration said the number of accounts it manages has doubled on average every six weeks during the past six months, to a few thousand accounts.
The company is one of several financial technology firms trying to cut out financial brokers, banks and other intermediaries by using automated tools designed to maximize returns.
Aspiration touts the fact that people can pay whatever fee they think is fair, even 0%. About one in 10 customers are not paying anything. It also donates 10% of revenues to charities that help businesses. The company's first fund "is designed to give steady returns less tied to the volatility of the stock market," Aspiration Chief Executive Andrei Cherny said.
The model has support from big names. Other investors include David Bonderman, founding partner of private equity firm TPG Capital; Lenny Mendonca, a McKinsey & Co. retired senior partner; and Frank Yeary, the former head of Citigroup's global mergers and acquisitions group.
"We are thrilled that this approach has not only resonated with so many customers, but now has received the backing of a group of brilliant and innovative leaders who share our mission," Cherny said in a prepared statement.
Aspiration requires a $500 minimum investment for mutual funds. Earlier this summer, the company introduced a checking account that it says can be used to withdraw funds at any ATM in the world for no charge.