The company has raised $300 million in a funding round that values it at $2 billion.
The announcement of the raise comes about six weeks after the consumer fintech startup said it was shelving its plans for its SPAC with Pioneer Merger Corp. in favor of an eventual traditional IPO. In January of this year, the New York-based company raised a $105 million Series E round at an $860 million valuation.
The company felt it wasn't the right time to go public, according to CEO Noah Kerner.
We are going to pursue a traditional IPO as we go forward.
In the first half of last year, the company acquired two companies, as well as raising money to fund growth and innovation.
Private equity firm TPG led its Series F, which also included participation from BlackRock, Greycroft, Owl Rock (a division of Blue Owl), Senator Investment Group, Torch Capital, Industry Venture, Bain Capital, Headline and Rich Kleiman. According to the website, the company has raised over $500 million.
The company has more than 4 million paid subscribers and exceeded its public forecast for the year, according to Kerner. The company had projected revenue of $126 million for the year when it was planning to go public. As of August 2021, it had 4 million subscribers.
The deck said that the process of growing revenue was expensive.
Alex reported that the company grew from $44 million in revenue to $71 million. Its gross margin improved over time. Alex found that the pace of revenue expansion increased from 50% to 61% in 2020. The company anticipated that it could increase that figure to more than 75% in 2021. We will have to wait to find out if the company actually abandoned its public plans.
The deck said that it expected its operating income to decline by $20 million in 2021, and its operating cash flow to decline by $35 million in 2020.
Acorns’ SPAC listing depicts a consumer fintech business with a SaaSy revenue mix
The ability to add a diversified portfolio and more family-specific offerings are in the works.
The company has created portfolios for its customers before. Kerner said the goal is to help them feel more engaged by giving them the ability to modify their portfolios.
He said that active engagement helps people learn more.
According to Kerner, there will not be a trading platform on which customers can use cryptocurrencies.
It makes sense to include it in a well-balanced, diversified portfolio because it is an uncorrelated asset class.
The company plans to continue building products that allow parents and their kids to save and invest, and get educated together.
Kerner said that Acorns has 700 employees and will continue to grow.
As for going public, the executive described the process of going public as a dry run.
When the time is right, we are prepared to execute with extreme excellence.
John Flynn said that his firm invested in the company a number of years ago because of the work it was doing to advance financial inclusion and financial health for everyday Americans.
He said that Acorns has established itself as a leader in long-term investing through an innovative and robust set of retirement and savings-focused products. With a clear value proposition, strong brand, and expanding product suite, we believe customers will increasingly see Acorns as an all-in-one account provider.
There are other fintechs that have recently abandoned their SPAC plans. Kin Insurance was about to go public with a special purpose acquisition company. The company raised $82 million in a Series D round of funding last week after it decided not to move ahead with the deal.
Just how wrong were those SPAC projections?
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