Investing App Acorns Goes Public Through $2.2B Blank-Check Merger

Savings and investing app Acorns plans to go public by merging with a blank-check company, reported CNBC. 

The fintech start-up announced a deal Thursday, May 27, to combine with Pioneer Merger, a publicly traded special purpose acquisition company. The merger values Acorns at roughly US$2.2 billion and is expected to close in the back half of this year.

When it is finalized, Acorns will trade on the Nasdaq under the symbols OAKS — a nod to the company’s motto and analogy of growing acorns into “mighty oaks.”

“Now was the time to go public to accelerate our growth and get the tools of responsible wealth-making in everyone’s hands as fast as possible, when they need it most,” said Acorns CEO Noah Kerner. “We just saw this as an accelerant on that journey.”

Institutional investors Wellington Management, Greycroft, TPG’s global impact investing platform, and funds managed by BlackRock also committed to a private placement as part of the announcement. Kerner and Pioneer’s sponsor each plan to contribute 10% of their personal ownership in Acorns as a gift to eligible Acorns customers.

The company, last valued at less than US$1 billion, has attracted venture investments from the likes of PayPal Ventures, BlackRock, Ashton Kutcher, Jennifer Lopez, and Dwayne Johnson, according to PitchBook. Comcast owns CNBC’s parent company, NBCUniversal, and is an investor in Acorns, and CNBC has a content partnership with Acorns.

Irvine, California-based Acorns had been in the process of closing another private funding round, Kerner said, but decided to go the recently popular SPAC route. He pointed to John Christodoro, a PayPal board member and chairman of Pioneer Merger, as the right partner and one reason Acorns bypassed a traditional IPO.

“Acorns is not only a category leader but also a category creator. Its value proposition is built around inclusive, long-term financial wellness,” Christodoro said in a statement. “With integrity at its core, the brand has an incredibly loyal following and market leading retention rates.”

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