Acorns Grow Inc., the popular spare-change investing and checking account app, and Pioneer Merger Corp. are canceling their $2.2 billion blank-check deal for the app to go public.
The deal was canceled due to market conditions, and the startup now plans to raise funding and pursue a traditional initial public offering, according to Acorns Chief Executive Officer Noah Kerner.
“We really appreciate the partnership with Pioneer. They exceeded expectations and helped make Acorns public-company ready,” Kerner said in a statement. “Given market conditions, we will be pivoting to a private capital raise at a higher pre-money valuation as we continue on our path to 10 million paid subscribers saving and investing for a better future.”
Acorns and Pioneer join a growing list of companies to terminate SPAC mergers as the froth comes out of the once-booming market. Wynn Resorts Ltd.’s online betting unit, grill-maker BBQGuys and software provider ServiceMax have all nixed blank-check deals in recent months.
Acorns was founded in 2014 and charges users monthly fees to invest cash or spare change in a series of exchange-traded funds. It also offers checking accounts, retirement savings and debit cards.
The company is working on a new service for later this year called Customizable Portfolios that will allow users to invest a small portion of their money in individual stocks, Bloomberg News has reported. The expansion for Acorns into direct investing will help the app rival other mobile-first platforms like Robinhood Markets Inc. plus legacy services like ETrade and Fidelity.
At the time of its merger announcement, Acorns had 4 million subscribers. It’s grown since then.
“Acorns has exceeded its public forecast, crossed 4.6 million paid subscribers and helped everyday Americans save and invest over $12.5 billion to date,” Chief Financial Officer Rich Sullivan said in a statement.
Pioneer, a special purpose acquisition company, is led by Chairman Jonathan Christodoro and Co-Presidents Rick Gerson and Oscar Salazar. Christodoro sits on the boards of companies including PayPal Holdings Inc., while Salazar was a co-founder of Uber Technologies Inc.
In the original deal, Citigroup Inc. served as an adviser to Pioneer as well as the exclusive placement agent on a $450 million PIPE, or private investment in public equity. Moelis & Co. advised Acorns.
The "Crypto Mom" departure would leave the SEC commission with just two members and no Democratic commissioners on the panel.
IFP Securities’ owner, Bill Hamm, has a long-term plan for the firm and its 279 financial advisors.
Meanwhile, a Osaic and Envestnet ink a new adaptive wealthtech partnership to better support the firm's 10,000-plus advisors, and RIA-focused VastAdvisor unveils native integrations with leading CRMs.
A former Alabama investment advisor and ex-Kestra rep has been permanently barred and penalized after clients he promised to protect got caught in a $2.6 million fraud.
As more active strategies get packaged into the ETF wrapper, advisors and investors have to look beyond expense ratios as the benchmark for value.
Wellington explores how multi strategy hedge funds may enhance diversification
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
