Acorns

These venture- and private-equity-backed startups are tackling some of society’s biggest challenges—and having an impact that belies their size.

Impact 20-2020-Acorns

A tech-driven financial services company, Acorns currently serves 8.2 million customers and has over $3 billion in assets under management. The eight-year-old California-based company is dedicated to teaching financial literacy to the up-and-coming and giving Americans the tools to save and invest, in an effort to close the country's wealth gap. The company's signature innovation is a setting on its mobile app that allows customers to automatically round up purchases up to the nearest dollar amount, and then invest that spare change in a low-cost, diversified portfolio of exchange-traded funds. With the pandemic heightening the importance of having an emergency fund, Acorns hopes that its app will make it easier for Americans to save money in preparation for future hardships. In June, the company launched Acorns Early, which allows parents to automatically invest in a similar investment account for their children, starting as early as birth. Acorns hopes to have that program reach one million children in the next year. The start-up raised $105 million in its 2019 Series E, giving it an $860 million valuation.

Impact 20

Get insights into Acorns including business profile, stock information, news, and rankings from Fortune.

Acorns Company Profile, Stock Price, News, Rankings

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Acorns | Fortune

Acorns Company Profile, Stock Price, News, Rankings | Fortune

[MUSIC PLAYING] JEN WIECZNER: You were once a DJ for Jennifer Lopez. How do you go from that to running a fintech company, Acorns? NOAH KERNER: That's a good question. So I was a DJ as a kid and I worked with a bunch of artists and then Jennifer Lopez, when I was really young. And then after college, I went on and started three different companies, a web company, and music company, and then a product development agency. And after the product development agency got acquired, I started looking at interesting startups in the world that were doing things that I thought were pretty profound. And Acorns was one of those companies. JEN WIECZNER: Tell me what Acorns actually is and how does it work. NOAH KERNER: Yeah, so what Acorns does on a better big picture level is it helps you set aside and invest small amounts of money that you wouldn't have otherwise set aside and invested. So we do that in a couple ways. We do it with our feature called Round-Ups. So every time you make a purchase, wherever you make a purchase, Acorns rounds up the purchase to the nearest dollar and invests the spare change into a portfolio that you've been selected into in our product. You can also set a recurring investment by the day, by the week, or by the month. And so if let's say you do $5 a day, it gets pulled from your bank account. And so it sets aside another small amount of money. We just rolled out a program called Found Money where we partner with specific retail brands and they invest in you as a reward for shopping with them. So if you become an Airbnb host, meaning you're going to rent your apartment as an Airbnb customer and you use the card you have link to Acorns, Airbnb invest $50 into your Acorns account. JEN WIECZNER: For everybody? NOAH KERNER: For everybody. If you sign up for Blue Apron, Blue Apron invests $30 into your Acorns account. Every month, you shop with Dollar Shave Club, Dollar Shave Club invests 10% of the purchase price into your Acorns account. JEN WIECZNER: And do millennials versus older people use it differently or save differently? NOAH KERNER: I mean, so older people tend to have a little more income, so they may contribute a little more. I mean, that's you know-- but we like to get people started as early as possible. Because, of course, the earlier you start, the better off you are in the long term. JEN WIECZNER: Steve Cohen, the legendary hedge fund manager and trader invested $2 million. What has it been like working with Steve Collins from Point72? NOAH KERNER: Point72 has been particularly helpful on the Found Money retail brand outreach, connecting us to people. And we're proud of the fact that someone like Steve Cohen who's a legendary investor would invest into our company. I think it says something about the company. JEN WIECZNER: So is there any research that shows people are more likely to save or that it's easier to invest small amounts of money, just pennies, versus, I don't know, $100? NOAH KERNER: Best research I have is the uptake of our product. We've seen a whole segment of people starting to do things like invest that they hadn't done before. I think some people are thinking about how to digitize parts of the industry that exist. We're thinking about creating a whole new opportunity for a market that didn't have opportunity before. We're in the sort of 75% of America that makes under $100,000 household income. That's who Acorns appeals to. That's the audience that, I think, generally sometimes feels disenfranchised, maybe is overlooked by the financial services industry that tends to focus more on the kind of 1%. I think when you think about what's happened in the country, which has a lot to do with economic inequality or feelings of economic inequality, we're trying to help that group, which is most of America. [MUSIC PLAYING]

Insights: How Acorns Turns Spare Change into Investments

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The robo-advisor is run by Jennifer Lopez's former DJ.

How Acorns Turns Spare Change into Investments

you were once a deejay for Jennifer Lopez. How do you go from that To running a fintech company? Acorn? That's a good question. So I was a deejay, is a kid on? I work with a bunch of artist and then Jennifer Lopez when I was really young and then after college, I went on and started three different companies Web Company, a music company and then a product development agency. And after the product of Roman agency got acquired, um, I started looking at interesting start ups in the world that we're doing things that I thought were pretty profound. And acorns was one of those companies. Tell me what acreage actually is. And how does it work? Yes. So what acorn does on a big picture level is it helps you set aside and invest a small amount of money that you wouldn't have otherwise. That is, I didn't invested. Do we do that in a couple ways? We do it with our future called roundup. Um, so every time you make a purchase, wherever you make a purchase, acorns, rounds of the purchase of the nearest dollar and invested spare change into a portfolio that you've been collected into a product. You can also set a recurring investment by the day by the weaker by the month. And so if let's say you do $5 a day gets pulled from your bank account. So it sets aside another small amount of money. We just rolled out a program called Found Money, where we partner with specific retail brands, and they invest in you as a reward for shopping with them. So if you become an Airbnb host, meaning you're gonna rent your apartment, Azan Airbnb customer and you use the card you have linked acorn Airbnb. Invest $50 into your account for everybody, for everybody. If you sign up for blue apron blue apron, invest $30 into your acorns account. Every month you shop with Dollar Shave Club Dollar Shave Club, invest 10% of the purchase price into your account and do millennials versus uh, older people use it differently or save differently. I mean, so older people tend to have a little more income, so they may contribute a little more than that, you know, But we like to get people started as early as possible. Of course, earlier you start the better off you are in the long term. Steve Cohen, the legendary hedge fund manager and trader, invested $2 million. Ah, what has it been like working with the going firm? 0.72 point 72 has been particularly helpful on the found money retail brand outreach, you know, connecting up to people. And we're proud of the fact that someone like Steve Cohen, who's a legendary investor, would invest into our company. I think it's something about the company. So is there a research that shows people are more likely a favor, that it's easier to invest small amounts of money, just pennies versus I Don't know, $100? Best research I have is the uptake of our product. We've seen the whole segment of people starting to do things like Invest that they hadn't done before. I think some people are thinking about how to digitize part of the industry that exist. We're thinking about creating a whole new opportunity for a market that didn't have opportunity before. We're in the sort of 75% of America that makes under $100,000 household income that two acres appeals to. That's the audience, You know that. I think generally somebody feel disenfranchised. Maybe is overlooked by the financial services industry that tend to focus more on the kind of 1%. Um, I think when you think about what happened in the country, which is a lot to do with economics, economic inequality or feelings of economic inequality, we're trying to help that group, Um, which is most of America?

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