Acorns To Go Public Via Merger With Pioneer SPAC at $2.2 Billion Valuation

Kimberly Redmond  |

Video source: YouTube, CNBC Television

Acorns Grow Inc (Acorns) announced Thursday it will go public through a merger with special purpose acquisition company (SPAC) Pioneer Merger Corp (Nasdaq: PACX) in a deal that values the popular savings and investing app at about $2.2 billion. 

As part of the transaction, Pioneer would contribute about $400 million in cash, with another $165 million coming from a related private placement involving Wellington Management Company, Senator Investment Group, Declaration Partners, Greycroft, TPG Capital and BlackRock Inc.

After the transaction’s expected close during the second half of 2021, Acorns said it would operate as Acorn Holdings Inc and trade on Nasdaq under the symbol “OAKS.” 

The new Acorns will continue to be led by the fintech startup’s current chief executive officer, Noah Kerner. 

Thursday’s announcement also noted that Kerner and Pioneer’s sponsor, an affiliate of Falcon Edge Capital and Patriot Global Management, each plan to contribute 10% of their personal ownership in Acorns as a gift to eligible Acorns customers.

Launched in 2012, Acorns automates investments and enables its users to invest spare change from daily transactions into the stock market. 

Since its founding, the subscription-based app has expanded into educational offerings, banking products, debit cards and an automated retirement account service.

Acorns now has more than 4 million subscribers on its platform who have saved and invested over $9.6 billion, according to the company. By 2025, Acorns expects its number of users to grow to 10 million.

The Irvine, California-based company, last valued at less than $1 billion, has attracted investors including PayPal Ventures, BlackRock, Ashton Kutcher, Jennifer Lopez and Dwayne Johnson, CNBC reported.

It also has a partnership with Comcast-owned CNBC to produce content related to financial literacy.

In a statement Thursday, Kerner said the backing of “trusted investors” has enabled Acorns to put “the tools of wealth making in everyone’s hands” and made it “possible for everyday consumers to responsibly manage their money over the long-term.”

He added, “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.”

Kerner told CNBC that Acorns was in the process of closing another private funding round but decided instead to go public via a SPAC. 

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He said John Christodoro, a PayPal board member and Pioneer Merger’s chairman, was instrumental in Acorns bypassing a traditional initial public offering (IPO).

"Acorns is not only a category leader but also a category creator. Its value proposition is built around inclusive, long-term financial wellness," Christodoro said in a statement. "With integrity at its core, the brand has an incredibly loyal following and market leading retention rates."

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Source: Equities News

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