Fintech Startup Acorns to Go Public in $2 Billion SPAC Deal
27 May 2021 - 9:50PM
Dow Jones News
By Peter Rudegeair
Acorns Grow Inc. plans to go public through a merger with a
blank-check company in a deal that values the digital savings and
investing app at about $2.2 billion, according to people familiar
with the matter.
The Irvine, Calif.-based financial-tech company is expected to
announce a combination with Pioneer Merger Corp., a special-purpose
acquisition company affiliated with the hedge funds Falcon Edge
Capital and Patriot Global Management, as soon as Thursday, the
people said. As part of the transaction and a related private
placement involving funds managed by BlackRock Inc., Wellington
Management Co. and other investors, more than $450 million in
proceeds will flow to Acorns's balance sheet, the people said.
Acorns automatically invests small contributions from users into
baskets of stocks and bonds. It counts more than 4 million
subscribers, most of whom pay $1 a month for the service, though
Acorns also offers $3-a-month and $5-a-month options for additional
features such as bank accounts or retirement plans. As of May,
Acorns had $4.74 billion in assets under management, according to a
recent regulatory filing.
Special-purpose acquisition companies, or SPACs, like Pioneer
are corporate shells that raise money from investors and go hunting
for a private company interested in taking both the shell's cash
and its stock listing as an alternative to an initial public
offering. SPACs have raised more than $100 billion in 2021,
according to data provider SPAC Research. But share prices for many
SPACs and the companies they have taken public have tumbled in
recent weeks.
SPACs have become a popular outlet for financial-tech startups,
with banking startup Social Finance Inc., real-estate platform
Better Holdco Inc. and trading app eToro Group Ltd. all agreeing to
multibillion-dollar deals with SPACs in recent months.
Write to Peter Rudegeair at Peter.Rudegeair@wsj.com
(END) Dow Jones Newswires
May 27, 2021 07:39 ET (11:39 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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