Suvarna Garge (Editor)

Acorns (finance)

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Type
  
Private

Founded
  
2012

Industry
  
Investment services

Headquarters
  
Newport Beach, California,United States

Key people
  
Walter Cruttenden (Founder, chairman) Jeffrey Cruttenden (Co-Founder)

Products
  
Financial services, asset management.

Acorns is an American finance company that offers a micro investing service. It allows users to round up their daily purchases and automatically invest the change into a portfolio of index funds through its mobile application. The company was founded in 2012 and has received $62 million in funding from PayPal, e.ventures, Greycroft Partners, Rakuten and others. Acorns is headquartered in Newport Beach, California.

Contents

History

Acorns was founded by Jeff Cruttenden and his father, Walter Cruttenden in 2012. Walter was an investment banker and had previously founded and served as CEO of Roth Capital Partners and e-offering, an investment banking firm. Jeffrey with his father worked on creating a mobile app for first-time investors to invest small automated investments from a bank account into diversified portfolios. Within less than two years of launch, Acorns opened nearly 1 million investment accounts. In May 2016, the company launched Found Money, through which retail partners like Jet.com, 1-800-Flowers, Dollar Shave Club, JackThreads and Hotel Tonight invest money into Acorns users’ accounts when they shop with the brands. Acorns Grow Inc. is the parent of Acorns Securities LLC, a member of FINRA and SIPC, and Acorns Advisers LLC, an SEC registered investment adviser.

The startup gained some traction and as of 31 March 2016, the company has 850,000 investment accounts with more than $150 million invested. It charges a $1 monthly fee for accounts with investments under $5,000, and charges 0.25% per year for accounts larger than $5,000.

Product

The application links with the user’s bank account, which automatically rounds up the transactions to the nearest dollar and withdraws the spare change to invest into six exchange-traded funds (ETFs). Customers accumulate fractional shares in one of five portfolios constructed by economist Dr. Harry Markowitz. The application allows users to set up one-time investments or daily, weekly or monthly recurring investments. As of September 2016 the following ETFs are offered by Acorns to invest through their service:

  • Vanguard S&P 500 Index ETF (VOO)
  • Vanguard Small Cap Index ETF (VB)
  • Vanguard Emerging Markets FTSE Index ETF (VWO)
  • Vanguard REIT ETF (VNQ)
  • BlackRock iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)
  • BlackRock iShares 1-3 Treasury Bond ETF (SHY)
  • Funding rounds

    As of 2016, Acorns has raised more than $60 million from investors including Paypal, Rakuten Fintech Fund, Sound Venture, Greycroft Partners, Capital Group, e.ventures, Liberty Media and others.

  • Series A funding of $2.5 Million in July 2013 led by Steelpoint Capital Partners.
  • Series B funding of $5.5 Million in March 2014 led by Jacobs Asset Management, with participation from clients of Digital Offering.
  • Series C funding of $23 Million in April 2015 co-led by Greycroft Partners and e.ventures, with participation from Sound Venture, Garland Capital, and MATH Venture Partners.
  • Series D funding of $30 Million in April 2016 with participation from PayPal, Rakuten Fintech Fund, e.ventures and Greycroft Partners.
  • References

    Acorns (finance) Wikipedia