If there’s one thing that Rich Sullivan knows, it’s how to talk to Wall Street.
Sullivan’s background on the Street includes vice president of investor relations at AT&T Inc., deputy chief financial officer at DreamWorks Animation SKG, CFO at STX Entertainment and most recently serving as vice president of corporate financial planning and analysis at $50 billion-valued Twitter Inc. (NYSE: TWTR).
He brings that deep background to Irvine-based Acorns Grow Inc., which named him CFO earlier this month in preparation for going public sometime later this year at a $2.2 billion estimated valuation.
“I have 20 years of public company experiences,” Sullivan told the Business Journal. “It will be beneficial” when talking to analysts and investors.
Acorns, which was co-founded in 2013 by well-known local entrepreneur Walter Cruttenden, is an investing and saving application that has attracted $4.7 billion in assets under management.
It’s one of the country’s more closely watched upstart fintechs, having helped its customers invest more than $9.6 billion.
The company has attracted a bevy of well-known investors including Ashton Kutcher, and companies such as Comcast Corp. and BlackRock Inc.
Sullivan takes over for Jasmine Lee, who will keep her role as chief operating officer.
“Rich brings a unique combination of expertise, vision, and commitment to mission,” Acorns Chief Executive Noah Kerner said in a statement. “Our next phase of growth as a company will only be fueled by his leadership.”
IPO Plans
In May, Acorns announced its plans to go public through a reverse merger with Pioneer Merger Corp. (Nasdaq: PACX), a publicly traded special purpose acquisition company, or SPAC.
Its prospectus predicted 2020 revenue could explode from $71 million in 2020 to $309 million in 2023.
It hasn’t yet generated positive cash flow and expects to lose $71 million this year on an adjusted EBITDA basis, which should fall to a $41 million loss next year. Cash was $41 million in 2020 and should rise to $471 million after it goes public this year.
The reverse merger is expected to be completed in the next few months. Acorns’ headquarters will remain in Irvine following the deal; its offices are at the University Research Park business park.
About 170 of Acorns 350 employees are in Irvine, ranking it No. 11 on the Business Journal’s annual list of software companies (see story, page 26).
Impressive Model
Besides a subscription-based revenue model, Acorns has also developed other revenue streams, such as allowing advertisers access to its more than 4 million subscribers.
“It’s a really impressive business model,” Sullivan said. “We have an opportunity to deliver new products to existing clients.”
Sullivan said that while there are some similarities between his former employers and Acorns, the latter is quite impressive.
“I’ve had the benefit of working with large consumer facing brands. Acorns has elements of all of that,” he said.
“I really think Acorns stands apart in
general and in the industry. It’s at the cross section of tech and finance and social responsibility.”
