PayPal is throwing its weight behind a mobile app called Acorns Grow by leading its $30 million funding round.
Acorns is designed to help young investors get into the game by enabling them to deposit small amounts that automatically goes into a brokerage account that buys into a group of exchange-traded funds.
The company also got backing from Rakuten Fintech Fund, and its previous investors Greycroft Partners and e.Ventures. Acorns acts as a robo advisory company which then works with online firms who manage their clients' money. According to a Wall Street Journal article on the investment, there are no specific plans for any deals between PayPal and Acorns, but that doesn't mean there aren't obvious possibilities.
This specific app is geared toward younger investors — aka: millennials — and may be something that PayPal could integrate with Venmo, etc.
“There’s lots of potential between Acorns and Venmo, and Acorns and PayPal,” incoming Acorns Chief Executive Noah Kerner said in an interview with WSJ.
With its new investment, PayPal will have a minority stake in Acorns, and as a result will be "looking forward to developing a strategic partnership," according to what a PayPal spokesperson said.
Acorns at the moment has 850,000 active investor accounts, and so far has raised $62 million from its strategic partners — which has all come since the app launched 20 months ago. And with millennials as its targeted audience, there's obvious potential for growth. Acorns charges users $1 per month for accounts with less than $5,000 and .25 percent for anything larger.
“Young people can keep growing their account in small amounts through lots of different sources," Kerner told TechCrunch. “With micro-investing, anyone can start growing wealth.”