Acorns Grow Inc., which offers a savings and investing app, is poised to go public by combining with Pioneer Merger Corp, a special-purpose acquisition company (SPAC) that is traded on Nasdaq. The combined company, with a valuation of about $2.2 billion, is expected to be traded as Acorns Holdings on the Nasdaq Capital Market.
According to a report from Pulse 2.0, institutional investors include Wellington Management, Senator, Declaration Partners, Greycroft, The Rise Fund, TPG’s global impact investing platform. Funds and accounts managed by BlackRock participated.
With more than four million subscribers, Acorns Grow has become one of the largest subscription services in U.S. consumer finance. The company offers education, investing, banking, earning and wealth-making, with subscriptions available in three membership levels. It said its mission is to look after the financial best interests of its customers.
Noah Kerner, CEO of Acorns, said the startup plans to “introduce a share rewards program that will allow eligible customers to own a piece of the company.” As part of the merger deal, Kerner said he plans to contribute 10 percent of his personal ownership in Acorns to fund the program.
Jonathan Christodoro, chairman of Pioneer, said that Acorns’ “value proposition is built around inclusive, long-term financial wellness.”
Acorns, which launched in 2014, is looking to accelerate its growth by going public. The deal is expected to close in the second half of 2021. Kerner will continue to lead the merged company.
Last year, SPACs took off. Proponents said it was a cheaper, more efficient alternative to guiding an existing business through the regulatory hoops of an IPO. While the excitement over SPACs has since waned, the Acorns deal shows there is still interest in the markets. The so-called blank-check companies are investment vehicles and do not have actual operations. Instead, they buy up other companies, such as Acorns.
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