Fintech Acorns plans to go public through a merger with special purpose acquisition company Pioneer Merger Corp. that would value the savings and investing app at about $2.2 billion.
The merger is expected to close in the latter half of this year, a press release shows. Acorns, which is based in Irvine, California, was last valued at less than $1 billion, according to Crunchbase.
A variety of investors committed to a private placement as part of the merger, including Wellington Management, Greycroft, TPG’s global impact investing platform The Rise Fund, and funds managed by BlackRock. The company plans to trade under the symbol OAKS on the Nasdaq.
“Going public will help elevate our story, introduce many more people to the power of compounding and financial wellness, and bring financial literacy to the mainstream,” Acorns CEO Noah Kerner said in a statement.
Kerner told CNBC that the company had actually been in the midst of closing a private funding round but decided to opt for the SPAC route to enter the public markets instead. John Christodoro, who is the chairman of Pioneer Merger and a PayPal board member, is one of the reasons Acorns picked going public via a SPAC rather than an IPO, Kerner told CNBC.
Both Kerner and Pioneer’s sponsor plan to contribute 10% of each of their ownership in Acorns to fund “a novel program giving shares to eligible customers,” the news release said.
“Acorns is not only a category leader but also a category creator. Its value proposition is built around inclusive, long-term financial wellness. With integrity at its core, the brand has an incredibly loyal following and market leading retention rates. I could not be more excited to partner with Acorns,” Christodoro said in a statement.
Acorns was launched in 2014 and helps folks manage their money by providing education, investing, banking and earning services on its platform. One of the ways the company makes money is from its subscription-based pricing platform.
In other recent fintech news, Resolve, which launched as a spinout from buy now, pay later giant Affirm in 2019, has received a $60 million capital injection to scale its embedded billing platform for B2B businesses to facilitate buying and selling on credit.