Acorns Grow Inc. has quickly sprouted another microinvesting product.
More than 350,000 consumers have enrolled in Acorns Spend, a new offering from the fast-growing Irvine-based fintech firm. It combines an Acorns-branded debit card tied to a checking account, and allows users to save and invest money.
The product’s quick growth has come in only a few months. Acorns launched the service in beta at the end of 2018 without a marketing campaign.
The first 100,000 debit cards for Acorns Spend, made out of tungsten, sold out in less than four days, according to news reports.
“We’re really head-down focused on Acorns Spend,” Chief Executive Noah Kerner told the Business Journal at the company’s newly minted headquarters at UCI Research Park.
The Acorns Spend product—similar to the company’s first big microinvesting app Acorns Core, which has more than 4 million users—rounds up spare change, but instead of investing it in exchange-traded funds, or ETFs, it’s redirected into automated retirement contributions.
The round-ups are in real time and include rewards from some local restaurants and shops that reinvest up to 10% of purchases back to the account.
Financial Wellness
The value proposition of Acorns Spend is essentially an extension of the company and Kerner’s vision for it to become “the first financial wellness network that enables everyday Americans to save and invest every day,” he said.
Acorns is making headway on that vision, less than five years after launching its first product.
The company was founded by area investment banking pioneer Walter Cruttenden—founder and former chief executive of what’s now known as Roth Capital—and his son, Jeffrey, with a goal of bringing microinvesting to the masses through a mobile app with nominal fees and no minimums.
Acorns now manages more than $1.2 billion in assets from over 4.5 million customers.
Walter serves as chairman.
Making a Statement
The rollout of Acorns Spend was staggered over the past few months to generate feedback from customers, according to Kerner.
“Now we’re deploying features based on all of our insights,” he said.
“It wasn’t a big reveal. It’s a ground up, bottoms up organic build.”
Users are charged a $3 monthly subscription fee for the service, which includes an investment and retirement account, financial literacy publication and a series of tips and advice to earn extra cash.
Acorns partnered with Iowa-based Lincoln Savings Bank for the digital banking aspect of the program and Visa Inc. (NYSE: V) in San Francisco for debit card transactions.
Kerner, a former executive at coworking real estate firm WeWork and founder of the millennial creative agency, Noise, is big on branding and product development.
The card issued to users of Acorns Spend reflects that focus.
Kerner wanted the green debit card made out of tungsten, a rare, super-dense earth metal that’s nearly impossible to melt, in order to make a statement.
“We invested a lot in each card,” Kerner said. “When you’re with a bunch of friends and you drop this card on the table it makes a statement about how you’re handling your business.”
He said one key goal of Acorns is to help its users overcome the stigma surrounding money issues, financial woes and retirement planning shortfalls.
A recent study commissioned by Acorns found that respondents would rather talk about their weight than their financial situation.
“There’s a ton of shame in debt, [and] not enough savings,” he said. “We want to give people hope and a sense of pride.”
HQ Redesign
Acorns Spend is one of several new developments for the company, which at the start of this month secured $105 million in a funding round led by NBCUniversal Media LLC.
Earlier this year, it moved operations to a 91,100-square-foot headquarters at 5300 California Ave. in Irvine, a building vacated a year ago by Broadcom Inc.
The stodgy office space left behind by the chipmaker has been turned into one of the area’s more unique buildings, featuring open-air designs and a large staircase that can double as a meeting area.
“This place we really constructed from the ground up to reflect our brand,” Kerner said of the renovation, which features built-in branch designs, hints of its clover green brand throughout the property and plenty of room for expansion.
“It’s a space that allows us to grow in the ways we need to grow and add head count over the coming years,” he said.
The property can accommodate close to 500 workers, a few hundred more than Acorns’ current workforce of 270, mostly based in Irvine.
Acorns website lists more than 60 open positions, including app designers, product managers and software engineers.
The company also operates an office in Portland, Ore. and one in New York, its financial media and education hub.
As part of this month’s Series E round—which valued Acorns at about $860 million, the 6-year-old company inked a partnership with CNBC that will include financial literacy content from the business network disseminated through Acorns’ smartphone app and website.
“It’s about building our brand further and it’s about creating great personal finance content with CNBC, which is an incredibly well-respected name in business news,” Kerner said.
New backers in the most recent funding round included Comcast Ventures and private equity firms DST and MSD Capital. Existing investors included BlackRock Inc., Bain Capital Ventures, and TPG’s Rise Fund.
Other notable investors include PayPal Holdings Inc., basketball star Kevin Durant and actor Ashton Kutcher.
