Acorns, a savings and investing app with a mission to bridge the wealth gap, has hired Twitter exec Rich Sullivan as its new CFO. Sullivan takes on the role of finance chief, leading the company towards a public listing on Nasdaq expected this fall.
“I’ve had the fortune in my career to work with some pretty big consumer-focused brands across several industries and business models that I think set me up well for Acorns,” Sullivan told me on Monday, his first day on the job. He was the VP of corporate financial planning and analytics (FP&A) at Twitter. Sullivan has also worked in finance leadership positions at AT&T, STX Entertainment, and DreamWorks Animation, where he served as deputy CFO during his tenure.
Jasmine Lee was in a dual role with Acorns as both COO and CFO since September 2019. Lee was “instrumental in preparing Acorns for the public market, and now she will have the ability to focus on executing the company’s strategic plan and overseeing the day-to-day operations as chief operating officer,” Acorns said in a statement.
The company has more than 4 million subscribers and is working towards a goal of 10 million by 2025. The median household income for subscribers is $50,000-$75,000; 60% are first-time investors; and 50% are parents, according to a May 2021 Acorns report. Its revenue in 2020 was $71 million. The fintech announced in May its going public by merging with Pioneer Merger Corp., a publicly traded special purpose acquisition company or SPAC. The merger will potentially value the company at $2.2 billion. Upon completion, it will operate as Acorns Holdings, Inc., expected to trade under the ticker OAKS.
“Rich brings 20 years of public market experience to help fuel the company’s growth,” Acorns CEO Noah Kerner told me. “He’s got that trifecta combination of subscription, tech, and family.”
Why did Acorns take the SPAC route? “We had a term sheet for another private round, and we were exploring the public market,” Kerner explains. But in January and February, as the COVID-19 pandemic continued, it was decided that going through a SPAC would be “an accelerant for us,” he says.
Acorns’ goal is to help the “everyday consumer” save and invest in diversified portfolios for the long term and to teach financial literacy, Kerner says. Its customers have invested more than $9.6 billion since the launch of the app at the end of 2014. The company charges monthly fees for services at levels of $1,$3, or $5.
The average age of an Acorns subscriber is 34 years old. When it comes to trends with younger investors, Kerner says the group is both conservative and aggressive. “It’s really a mix of trends,” he says. “On the one hand, there are young people who are getting very active and engaging in trading. And then there are young people who are well understanding the virtues of diversification, the power of compounding, and growing their knowledge to make really well-informed decisions.”
In support of its mission, Acorns plans to give shares to eligible customers when it begins to trade on the Nasdaq. “We’re using loyalty criteria to determine who gets shares,” Kerner says. “I’m giving 10% of my ownership. Additional team members are giving a percentage of their ownership, and our partner Pioneer is giving 10% of their version.”
In a nutshell, shares of Acorns will be a nice thing to gather.
See you tomorrow.
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