Investing App Acorns Raises $300M, Lifts Valuation to $1.9B

Irvine, California-based FinTech startup Acorns has raised $300 million from private investors, CNBC reported Wednesday (March 9).

Acorns specializes in micro-investing and robo-investing. Following the transaction, the savings and investing app is valued at $1.9 billion, more than double its last valuation, according to Acorns CEO Noah Kerner.

The Series F round was led by private equity firm TPG and saw participation from Bain Capital Ventures, BlackRock, Galaxy Digital and Thirty Five Ventures, the investment firm co-founded by Brooklyn Nets forward Kevin Durant.

The cash infusion comes less than one month after the investing and checking account platform abandoned its $2.2 billion initial public offering (IPO) with special purpose acquisition company (SPAC) Pioneer Merger Corp.

“The markets got very volatile,” Kerner told CNBC. “The concerns we had about the [SPAC] market were that we would get lumped into a group of companies that perhaps were valuing themselves in inflated ways.”

In January, Kerner said Pioneer helped make Acorns a public-company ready, but said they scrapped the deal because of market conditions and because the company was weighing a conventional IPO.

See also: Investment Platform Acorns Calls Off IPO with Pioneer SPAC

Founded in 2014, Acorns said it enables consumers to round up purchases and use that spare change for investing in exchange traded funds. Users can also invest additional cash directly with Acorns, and the startup also offers checking accounts, retirement savings and debit cards.

While Acorns’ $1.9 billion valuation is below the $2.2 billion target when it announced plans to merge with a SPAC, Kerner explained that’s because the firm would have raised more cash through the SPAC.

“Private investors are taking a long, hard look at the companies they invest in,” Kerner said. “They’re taking a long, hard look at valuations. I’ve had conversations where private market investors were cutting valuations in half.”