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United States : ACORNS CORP offers a new application for credit card transactions

August 28, 2014



Acorns Corporation offers a new application that monitors daily credit card transactions and pockets spare change into an investment account. The first application of its kind, it is growing like a weed. The cell phone application is in beta and not promoted, has attracted 11,000 investors and $10 million under management in 3 months.

Acorn received a $8.3 million in funding, $5.5 million of which was a Series B round led by Jacobs Asset Management, a well known $750 million fund that invests in financial firms, and clients of Digital Offering, a technology driven investment bank, participated in this round.

Millions of people put off starting an investment account and miss years of compounding because they can t pull together a lump sum, or they think they don t have extra money to add each month or they just find the process too intimidating or complicated. The Acorns app solves all these problems.

An average of $7 per day each week from investors, Acorn expects to see an average account size over $5,000 in 2 years. The application invests money for investors without taking any commission, has no minimum account balances and has no fees for withdrawal.

Acorns takes customer information asks a few questions about risk appetite and then builds and maintains an investment portfolio.

The company invests the money in the stock market, but this isn t just any investment. It is investment in a diversified by Nobel prize-winning economist Harry Markowitz, renowned in investment circles for his sometimes criticized but respected Modern Portfolio theory of diversification.

The goal is to build an application that complements a consumers spending habits. Rather than waiting to invest until they have a large lump sum, it is to encourage people to invest while they build wealth.

Different from other financial tech startups, Acorns build a proprietary advisory and self-clearing brokerage platform that not only enables micro investing, but offers an end-to-end investment management experience through a mobile app.


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Source: TendersInfo (India)


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