Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Via SPAC, a $4.7B-AUM Robo Will Go Public Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, May 27, 2021

Via SPAC, a $4.7B-AUM Robo Will Go Public

Reported by Neil Anderson, Managing Editor

Seven years in, a roboadvisor is poised to go public later this year.

Noah Kerner
Acorns
CEO
This morning, Noah Kerner, CEO of Acorns Grow Incorporated, and Jonathan Christodoro, chairman of Pioneer Merger Corp., unveiled a deal under which privately held Acorns will merge with publicly traded Pioneer (a SPAC trading under PACX on the Nasdaq). The deal, slated to close in the latter half of 2021 (pending approval for Pioneer's shareholders), would transform the combined company into Acorns Holdings, Inc., using a new ticker (OAKS, also on the Nasdaq), with Kerns staying on as CEO. The deal is expected to value the combined company at $2.2 billion.

(Pioneer has already made several SEC filings, which offer more insights into the merger.)

Citi is advising Pioneer on the deal and is the placement agent on the concurrent private placement, while Moelis & Company LLC is advising Acorns. On the legal counsel side, Kirkland & Ellis LLP is supporting Pioneer, Paul Hasting LLP is supporting Acorns, and Latham and Watkins LLP is supporting the private placement.

Acorns, founded in 2014 by Walter and Jeff Cruttenden, now has more than 9 million signups, including more than four million "loyal everyday American subscribers." According to its most recent form ADV (filed on May 19), Acorns had $4.736 billion in AUM and 4.346 million clients (4,345,537, to be exact). So Acorns' average account size is tiny by wealth management industry standards: that AUM translates into an average of $1,089.93 per client. Meanwhile, the $2.2-billion valuation of the SPAC deal translates into a whopping 46.5 percent of Acorns' AUM, a valuation that any asset manager would be envious of (but a far cry from its early stage 332 percent of AUM valuation back in 2015).

Yet Acorns' business model differs from those of traditional asset and wealth management shops (though like other roboadvisors, its portfolios have traditionally been built out of ETFs). Instead of AUM-based fees or commissions, Acorns charges flat monthly fees of $1, $2, or $3 per account. And they use an app, and the idea of rounding up when purchasing, to help encourage small, frequent contributions, especially among younger investors, with an eye towards building long-term relationships and habits. Back-of-the-envelope math suggests that those 4.346 million clients translate into between $4.346 million and $13.037 million in monthly revenue, or between and $52.146 million and $156.439 million in annual revenue (with a staff, according to the form ADV, of 304 employees, not including clerical workers). Framed that way, the $2.2-billion valuation then translates into between 14 and 42 times revenue, roughly.

Acorns' current backers include BlackRock and Capital Group, as well as fintech giant PayPal, cable and media giant Comcast (through its NBC Universal and Comcast Ventures arms), and other PE and VC firms. (Other institutional investors in Acorns include: Bain Capital, DST Global, eVentures, Greycroft, Rakuten, Sound Ventures, and TPG.) The roboadvisor's backers also include a number of celebrities, like Kevin Durant, Dwayne Johnson, Ashton Kutcher, and Jennifer Lopez, plus at least one fundster CEO. (Kerner is actually Lopez's ex-DJ!) And Acorns' economic advisors include the likes of Schlomo Benartzi, Harry Markowitz, and Dick Thaler.

Pioneer, meanwhile, IPOed back in January, raising $402.5 million. Its backers include Falcon Edge Capital and Patriot Global Management, and its executive team includes a former CEO of E*Trade, a co-founder of Uber, and other tech investing veterans. 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly


  1. The 32nd Sub-Advised Funds Forum, Sep 20-21
  2. Crane's Money Fund Symposium, Sep 21-23
  3. Expect Miracles Foundation's 4th Annual Atlantic Coast Classic, September 21
  4. ICI 2021 Virtual Tax and Accounting Conference - Day 1, September 21
  5. MFDF webinar - the Nuts and Bolts of SPACs, September 22
  6. Morningstar Investment Conference, Sep 22-24
  7. Nicsa webinar - Listen, Learn & Lead | Utilizing Beneficial Partnerships, September 22
  8. MFDF Director Discussion Series - Open Forum via Zoom, September 23
  9. MMI Distribution Leadership Forum - Day 2, September 24
  10. Citywire Greenwich Harbor Retreat 2021, Sep 27-28
  11. Inside ETFs, Sep 27-29
  12. MFDF webinar - MPI's 2021 Mid-Year Survey of Investment Firm Profitability, September 28
  13. ICI 2021 Virtual Tax and Accounting Conference - Day 2, September 28
  14. IMEA In-Person Leadership Summit, September 29
  15. ALFI Digi Pulse USA, September 30
  16. ICI 2021 Virtual Tax and Accounting Conference - Day 3, October 5
  17. Nicsa 2021 General Membership Meeting, Oct 6-8
  18. MFDF webinar - BDCs 101: The Board Perspective, October 13
  19. MFDF Director Discussion Series - Open Forum (New York), October 14
  20. Fund Intelligence Mutual Fund Industry and ETF Awards, October 14
  21. 2021 Nicsa GMM - Digital Innovation Summit, October 19
  22. 2021 MMI Annual Conference, Oct 20-28
  23. Tiburon CEO Summit XLI, Nov 1-3
  24. MFDF webinar - ISO Crypto Exposure: What Boards Need to Know, November 9
  25. MFDF Director Discussion Series - Open Forum via Zoom, November 18
  26. MFDF webinar - Fund Industry Claims Trends: An Insurer's Perspective, December 2




©All rights reserved to InvestmentWires, Inc. 1997-2021
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use