Acorns, the micro-investing app that allows users to invest their ‘spare change’ or ‘acorns’ in an automated manner, has today announced a $30 million round of financing. It was obtained from PayPal and with participation from the Rakuten Tech Fund and existing investors e.ventures and Greycroft Partners to help the company expand its partnerships and automated investment features, according to a company press release.
Acorns was originally founded in 2012, and in recent years became more fintech focused as the company’s app was launched and after setting up Acorns Advisers, LLC, which acts as the Registered Investment Advisor (RIA) with the Securities and Exchange Commission (SEC), and with its brokerage services handled via its SEC-registered broker-dealer Acorns Securities.
In barely 20 months since launching, the company has amassed 850,000 customer accounts, offering features like ‘Invest the Change’ which takes the difference between the cost of everyday card purchases and the nearest dollar rounded-up and invests the difference in a diversified portfolio of low-cost exchange traded funds (ETFs). Investing in low-cost ETFs has been a popular approach for automated investment platforms, including robo-advisor offerings.
Commenting in the official press release, Walter Cruttenden, co-founder and soon-to-be Chairman of Acorns, said: “Having PayPal and Rakuten as partners will make it possible to bring the benefits of micro-investing to more and more people around the world. We believe that micro-investing will ultimately comprise the majority of new investment dollars entering the markets.”
“Acorns and PayPal share a vision of democratizing financial services and offering innovative solutions to help people build financial health,” said Joanna Lambert, vice president of global consumer product and engineering at PayPal, commenting in the official press release.
Predominantly millennial customers
With nearly 75 percent of Acorns’ users between the ages of 18 and 34, millenials continue to be drawn to the appeal of new fintech firms that leverage simple and intuitive mobile apps coupled with the ability to automate the investment process, and solutions like Acorns that enable micro-investing appear to be gaining ground, alongside the micro-insurance industry and micro-loan space.
We believe that micro-investing will ultimately comprise the majority of new investment dollars entering the markets.
ACY Securities Supports ASIC’s Product Intervention OrderGo to article >>
Oskar Mielczarek de la Miel, Managing Partner at the Rakuten FinTech Fund, commented in the press release: “We are very excited about Acorns’ high growth model and the close alignment between Acorns’ philosophy of financial empowerment of the millennial community and Rakuten’s core values.”
“Technology is breaking down barriers to financial participation. PayPal is excited to support Acorns as they continue to use mobile technology to innovate in micro-investing, and empower millennials to take charge of their finances.”
The news follows PayPal announcing a synergy with Village Capital aimed to democratize financial services for the poor, that Finance Magnates wrote about earlier last quarter, and the $23m that Acorn received previously from existing investors.
Finance Magnates is proud to present its inaugural TLV Conference, to be held on the 29th of June. Apart from the invaluable networking opportunities, the agenda is packed with panels, masterclasses and keynote speeches geared towards the subject of fintech. Industry leaders will be discussing subjects such as marketing automation, cybersecurity, financial regulation and cryptocurrencies, with a focus on the booming Israeli fintech scene. In keeping with this, there will also be a fintech spotlight session in which a lineup of firms will each have four minutes to pitch their exciting products, culminating in an award presented to the most promising.