PayPal Participates in $30m Round in Acorns Micro-Investing App
Monday, April 25, 2016
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-advisorofferings.
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.”