Irvine-based Acorns Grow Inc., fresh off a $50 million funding deal headed by investment giant BlackRock Inc., plans to nearly triple the size of its local headquarters near the University of California-Irvine.
The fast-growing fintech firm, which has built an investment app for individuals that now manages more than $800 million raised from over 3 million users, recently signed a lease for an entire building at the UCI Research Park office campus in Irvine.
The four-story office at 5300 California Ave., the former headquarters of chipmaker Broadcom Inc. when it was based in Irvine, has about 91,100 square feet. Acorns plans to move in by year-end. Its current headquarters, a few miles away at the Newport Gateway office tower complex, totals a little more than 30,000 square feet.
Both UCI Research Park and Newport Gateway are operated by dominant area landlord Irvine Co. in Newport Beach.
The lease, in addition to being one of the biggest area office deals of the year, is also one of the biggest recent space expansions of a homegrown company.
Acorns has been operating in somewhat cramped offices but also plans a big hiring spree, with nearby UCI graduates a likely source of employees, say sources familiar with the deal.
The company’s website lists about 20 open positions in Irvine, primarily in engineering and design.
“This move marks an important moment in our growth,” Acorns Chief Executive Noah Kerner said in a statement. “We’re excited to build an inspiring home for our team and the top talent we hope to attract.”
Acorns employed 114 in Irvine as of last summer, and was Orange County’s 21st-largest software company by local employment, according to Business Journal data. Its website now lists nearly 170 employees; Acorns also has offices in Portland and New York.
The new space should be large enough to comfortably hold nearly 500 employees, according to Irvine Co.
“We are thrilled that Acorns chose UCI Research Park as the place to accelerate their already explosive growth,” Irvine Co. Office Properties Vice President Tom Greubel said in a statement.
Acorns was represented in the lease by JP Roach and Brett Lessman, brokers with the Irvine office of tenant representation firm Hughes Marino.
They declined to comment on the just-completed transaction.
BlackRock Backing
The office move is Acorns’ second notable news in the past month.
Early this month, it disclosed that New York-based BlackRock, the world’s largest asset manager, with $6.3 trillion, was heading a $50 million funding round in the company, which was created in 2012 by local investment banking pioneer Walter Cruttenden and his son Jeffrey.
The duo launched Acorns to bring microinvesting to the masses through a mobile app featuring nominal fees and no minimums. It launched its first product in 2014.
The company, now led by Kerner, a former executive at co-working real estate firm WeWork, has raised nearly $150 million, according to data from funding data research firm Crunchbase Inc. Walter Cruttenden serves as chairman.
Bain Capital Ventures, Greycroft Partners and PayPal Holdings Inc. are also investors, as is basketball star Kevin Durant and actor Ashton Kutcher.
The BlackRock investment was portrayed in national press reports as part of an effort by the investment giant to grow influence beyond larger financial institutions to individual investors. The amount it contributed wasn’t revealed, though it said in a statement that it will be an Acorns “anchor investor and key partner.”
BlackRock already was a business partner of Acorns, whose products portfolio helps consumers automatically invest spare change from everyday purchases into diversified exchange-traded fund portfolios.
ETFs “[It’s a] unique vehicle, phenomenal building block,” BlackRock Americas Region head Mark McCombe told the Business Journal during a recent visit. “It’s a very efficient way to gain exposure to the market.”
BlackRock-run ETFs are marketed by its iShares subsidiary. ETFs and Vanguard are the primary recipients of Acorns’ investments. It’s placed a small amount of funds in an ETF run by Newport Beach-based Pacific Investment Management Co., according to recent filings with the Securities and Exchange Commission.
Acorns said this month that it now has 3.4 million investment accounts, and it claims to have the country’s fastest-growing microinvesting app. Nearly 60% of company account holders have gone on to invest through its app, according to regulatory filings.
As of April, Acorns managed $803.7 million in assets across 1.9 million investment accounts. About 20% of users are described as “high-net worth” individuals, according to filings.
Last month the company launched Acorns Later, its first tax-advantaged product offering, which helps users open and fund retirement accounts.
Campus Reinvention
Acorns’ relocation will be the second time it’s taken office space formerly occupied by a notable area technology firm. Its current offices were last used by virtual reality firm Oculus VR Inc. before it moved to Silicon Valley after its 2014 sale to Facebook Inc. for $2 billion.
Broadcom’s former multibuilding campus at UCI Research Park, the 185-acre office property previously known as University Research Park, has recently been a hotbed of leasing activity, with some 235,000 square feet in deals.
Early this month, the Business Journal reported that a unit of Dublin-based medical device maker Medtronic PLC is leasing a nearly 102,000-square-foot building there in what would be the largest office lease of the year so far by square footage.
Covidien Neurovascular, which Medtronic acquired in 2015, occupies the entire building, say real estate sources familiar with the transaction. Neither the tenant nor the landlord has confirmed the deal.
Also moving to larger space at the campus is Irvine-based ticketing technology company Paciolan, which recently signed a 42,000-square-foot lease at 5291 California Ave., another former Broadcom building that’s now undergoing a major renovation.
Irvine Co. said it’s already leased more than half of the chipmaker’s former headquarters, which encompassed 11 buildings totaling about 836,000 square feet.
Broadcom began moving to new facilities in Great Park Neighborhoods late last year.
UCI Research Park has been undergoing a big redevelopment in preparation for Broadcom’s departure and the conversion of the campus into a multitenant office park.
Additions Irvine Co. has built there include the one-acre Vine Park, a digitally-enabled, open-air venue for events and exhibitions, and redesigned building interiors, a cafe, on-site coffee kiosk, fitness centers and additional outdoor spaces for tenant use.
