The company behind the popular Acorns app will go public by merging with blank-check company Pioneer Merger (PACX), after reports resurfaced of a Robinhood IPO.
The deal values the savings and investing app at about $2.2 billion and is set to close in the second half of this year. It will trade under the symbol OAKS on the Nasdaq.
Acorns, last valued at under $1 billion, said that institutional investors Wellington and BlackRock (BLK) also took part in a private placement.
“Going public will help elevate our story,” CEO Noah Kerner said in a news release.
It’s one of a crop of investing apps to popularize automated investing with everyday Americans, disrupting big online brokers. Peers include Robinhood, Betterment and Wealthfront.
On Tuesday, CNBC reported that a Robinhood IPO is nearing “in the coming months” in a deal that could value the zero-fee stock trading app above $30 billion. A public debut for Robinhood app has been talked about since at least 2018, but the popular millennial investing app has had several, high-profile setbacks of late.
While Acorns and Robinhood are in the same category of investing apps with millennial appeal, Robinhood focuses on individual stocks and Acorns focuses on funds.
Pioneer Merger stock rose 1.6% to close at 9.91 on the stock market today. Charles Schwab (SCHW), which acquired rival TD Ameritrade after apps offering free stock trades forced established brokers to slash and then end trading commissions, rallied 3.2%. Interactive Brokers (IBKR) dipped 0.5%. Morgan Stanley (MS), which purchased E-Trade, added 1.1%.
Acorns App Users
Launched in 2014, the Acorns app found success with millennials and rookie investors with a slick smartphone-based interface. The fintech company also countered the notion that investing is for the rich with slogans like “invest your spare change” and “from acorns, mighty oaks do grow.”
The Acorns app automatically invests users’ spare change in low-cost index funds. Services like debit cards and rewards were added over the years.
It has more than 4 million subscribers, doubling since 2019. By 2025, the investing app expects to grow to 10 million subscribers.
California-based Acorns was closing another private funding round, but decided to go the popular blank-check route. That involves a reverse merger with a special purpose acquisition company, or SPAC.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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