Acorns Grow Incorporated is set to go public through a merger with a publicly traded special purpose acquisition company (SPAC).
The fintech startup signed a definitive business combination agreement with Pioneer Merger. The combined company is expected to have a pro forma fully-diluted equity value of around $2.2bn.
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The deal is expected to close in the second half of this year.
Once it closes, the combined company will operate as Acorns Holdings and will trade on the Nasdaq Capital Market as OAKS.
It will also receive more than $450m at closing with several institutional investors committing to an oversubscribed, upsized private placement. The investors include Wellington Management, TPG and funds and accounts managed by BlackRock.
Acorns CEO Noah Kerner said: “I am humbled to represent everyday Americans in the global public markets.
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By GlobalData“With the backing of trusted investors including BlackRock, PayPal, NBCUniversal and Comcast Ventures, we are putting the tools of wealth making in everyone’s hands and making it possible for everyday consumers to responsibly manage their money over the long-term.
“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.”
Acorns specialises in micro-investing and operates on a subscription-based model. The company’s app enables users to save and invest in a low-cost, diversified portfolio of exchange-traded funds.
It is said to have more than four million subscribers in the US.
Pioneer chairman Jonathan Christodoro said: “Acorns is not only a category leader but also a category creator.
“Its value proposition is built around inclusive, long-term financial wellness. With integrity at its core, the brand has an incredibly loyal following and market leading retention rates.”
