36. Betterment

A robot to replace your advisor

Jon Stein, founder and CEO of Betterment
Source: Betterment
Jon Stein, founder and CEO of Betterment

Founders: Jon Stein, Eli Broverman
Date launched: 2008
Funding: $105 million (Source: CrunchBase)
Industries disrupted: Personal finance, investing

Betterment is looking to break out in front of the pack of online financial services companies—so-called "robo-advisors"—to win the portfolios of investors. The New York City-based company, co-founded in 2008 by Harvard graduate Jon Stein, aims to attract clients—especially millennials—with automated tools and mobile apps that allocate portfolios to maximize returns and minimize taxes. And it does it with fees lower than the industry standard, because there are few human advisors involved.

Read MoreFULL LIST: 2015 DISRUPTOR 50

Unlike competitor Wealthfront, Betterment has no minimum amount that customers need to invest to get started. The company has about 90,000 customers and manages about $2.1 billion in assets. It charges fees ranging from 0.15 percent to 0.35 percent of assets, depending on the size of the account.

Research shows that the U.S. wealth-management market is valued at around $17 trillion. Venture funds, including Bessemer Venture Partners, Menlo Ventures and Northwestern Mutual Life, have invested $105 million in the company in the hope that it keeps grabbing a bigger piece of that pie.

"We'd like to put target date funds, annuities and mutual funds out of business. There's no good reason for them to exist anymore." -Jon Stein, founder and CEO

Latest Special Reports

  • Shoppers walk inside the Westfield Santa Anita mall during the outbreak of the coronavirus disease (COVID-19), in Arcadia, California, June 25, 2020.

    Coverage of the world's largest retail trade organization's annual conference.

  • Innovative female entrepreneur examining prototype

    In an era of rapid technological advances and demographic change, how do legacy companies adapt, innovate and evolve? CNBC Evolve features iconic global companies and executives who are embracing change and transforming for the future.

  • The personal and economic pain from the COVID-19 pandemic is being felt all over the world. As a result of this unprecedented disruption, businesses owners and employees are dealing with an immeasurable level of suffering and facing scenarios they never could have imagined. Through expert analysis and advice from proven business leaders, The Path Forward explores the extraordinary challenges businesses are facing and offers ideas to help owners navigate this global crisis and thrive once again.

Tech