NEWPORT BEACH, CA--(Marketwired - Mar 12, 2014) - Acorns, the first micro-investing platform which allows people to harvest, save and invest small amounts of money on the fly, today announced the closing of their latest round of funding. The $5.5 million Series B was led by Jacobs Asset Management, a $750 million financials only fund, based out of New York. Clients of Digital Offering, a next generation, technology-driven investment bank, also participated in the round. This deal marks one of the first funding announcements made possible by the JOBS act. To date, Acorns has raised a total of $8.3 million. In stealth development for almost two years, Acorns will use the funds to launch their mobile app and financial engine.
Led by financial markets innovator Walter Cruttenden, and advised by a group of industry heavyweights, including Dr. Harry Markowitz, the father of Modern Portfolio Theory, Acorns is the first financial services company to make micro investing economical. By enabling the investment of aggregated sub-dollar amounts in fractional shares with high frequency, micro investing allows people to save and invest in ways previously thought impossible. For example, the Acorns app rounds-up credit and debit card purchases to the nearest dollar, then automatically collects and invests that spare change into a portfolio of index funds offered by three of the world's largest money managers: Blackrock, Vanguard and PIMCO. Leveraging the ubiquity of the smartphone, cofounder Jeff Cruttenden designed the system to harness the power of micro investing and make it accessible via a rules-based app powered by a proprietary financial engine.
"For many people, traditional investing strategies aren't realistic or economical, especially for those just starting out," said Walter Cruttenden, cofounder and CEO of Acorns. "By breaking the increments into almost unnoticeable amounts of money, we open up new avenues to save and invest. And by sweeping these funds into a well-diversified portfolio, people can realize the benefits of compounding, dollar-cost averaging and portfolio rebalancing that comes naturally with high frequency investing. We believe micro investing can help people build a better financial future without conscious effort."
According to the Employee Benefit Research Institute (EBRI) 2013 Retirement Confidence survey, nearly half of all US workers expressed concerns about having enough money for retirement. In fact, only 13 percent of workers claimed they were very confident they would be able to retire comfortably. The lack of confidence can be attributed to the late realization of exactly how much is needed to retire, along with more immediate financial concerns and responsibilities. Despite having access to a retirement plan provided by their employer, the EBRI survey also found that 41 percent of workers cite the cost of living and day-to-day expenses as the primary reason they don't contribute to their retirement plan. For aspiring investors or millennials just starting out, micro investing is a viable financial strategy to kick-start their investing and to create a safety net for their future. While historical performance is no indication of future results, the cumulative effect of investing just a dollar a day for the last 50 years in a small cap tilted portfolio would be worth roughly one million dollars today.
Behind the app is the Acorns platform, a proprietary brokerage and advisory engine, uniquely designed and built to make micro investing economically feasible with no minimum account balances or commissions on trades. According to Dr. Harry Markowitz, Acorns' Advisory Board Member and Nobel Laureate in Economics for Modern Portfolio Theory, "Investing in a broadly diversified portfolio for the long term is the right choice for most people. Acorns enables this to happen automatically in tiny increments with minimal cost. This has the potential to help people across all demographics."
Commenting on JAM's investment in Acorns, Mike Sekits, Director of Private Equity at Jacobs Asset Management, said, "By shifting the transaction size to the lowest possible unit Acorns is changing the investing paradigm, opening the door for an entire generation to start investing early and often. Rather than being a daunting process that involves a significant upfront financial commitment, investing will become something anyone can do, anywhere, at any time. We think micro investing is going to be a very big trend -- and Acorns is well positioned to become a market leader."
You can find more information about how to open an Acorns account at: www.acorns.com
About Acorns Grow Inc.
Acorns is the first true micro investing company, allowing people to round up purchases and automatically invest the change®. The Acorns app and financial engine is built to help people micro invest commission-free into a diversified portfolio of index funds offered by the world's largest asset managers: Vanguard, Blackrock, and PIMCO. Customers purchase fractional shares, automatically saving and investing small amounts of money frequently. The app can also help identify and gather found money, such as rebates and rewards, which can be automatically swept into the customer's investment account. Like the alarm app that helps you wake, and the calendar app that helps you keep appointments, Acorns works behind the scenes, saving and investing pennies at a time, so you don't have to. From Acorns mighty oaks do grow!
Acorns Grow Inc. (d/b/a/Acorns) is the parent of Acorns Securities LLC, a member of FINRA and SIPC, and Acorns Advisers LLC, an SEC registered investment adviser.
This is not an offer or a solicitation to buy or sell securities. Investing involves risk. Investments are not FDIC or NCUA insured. Projections are hypothetical in nature.