Estimated valuation: Unknown. 

Product: Micro-Investing platform

IPO Timeline: To be determined

Date Founded: February 29, 2012

According to Crunchbase, Acorns Grow Inc. is the “largest and fastest growing investment app.” It was founded by father and son Jeff and Walter Cruttenden in Newport Beach, California. Targeted at those new to investing, Acorns strives to get consumers started investing early and regularly. The company mission is to “look after the financial best interests of the up-and-coming.” Acorns describes its approach as micro-investing. As of February 26, 2017, it has received $62.96 million in funding.

How It Works

There’s ample research to support the idea that small activities, performed regularly, lead to big results. Whether it’s working a little bit every day on your novel or investing a small amount of money regularly, over time the results add up.

To get started, users must download the app, input their email address, and create a password. Next, they link their bank account and any credit or debit cards. Before getting started, several questions must be answered to inform the platform of age and risk comfort level. Depending on the answers, the Acorns app will select target percentages in stock, bond, and real estate exchange-traded funds (ETFs). Allocations can be changed manually at any time. Money will be funneled into the pre-determined asset classes.

There are two major ways to invest using Acorns. First, you can make a lump sum or recurring deposit into your Acorns account from your bank. The second way is the round ups. After connecting debit and/or credit cards, you can set Acorns to round up your purchases and invest the difference. Buy a sandwich for $9.25 and Acorns automatically invests $0.75 or the difference between $9.25 and $10.

To keep you motivated and investing, an “Account Strength” screen offers ideas to increase your investing and checks them off as you achieve certain goals. Here are some of the “Account Strength” metrics:

  • Make a recurring deposit
  • Link a round-up account
  • Link a second round-up account
  • Get your account level to $100
  • Link your checking account
  • Get your account balance to $10

The Acorns Found Money® approach adds even more to your Acorns investing account when linking a credit or debit card. When you shop with "Found Money" online partners, a percentage of the purchase is deposited into your Acorn account similar to how cash-back sites work.

Fees and Minimums

Once your account balance reaches $5, Acorns will start investing on your behalf. The fee schedule starts at $1 per month for accounts valued at less than $5,000 or 0.25% per year for assets under management (AUM) of $5,001 and over. If you are a student or between ages 18 to 23 years old, you can invest with Acorns for free.

Investor Education

Ideal for new investors, Acorns educates users on the power of compound returns. The app shows estimated account values at a later date for certain deposit amounts. For example, if you choose a “moderate” portfolio and deposit $100 per month, it illustrates what your account could be worth at a certain age.

Over time, you can access a screen that shows how your account is performing for various time periods from one day to six months, one year, or since the beginning. You’ll see the total account value as well as the percentage gain or loss for the specified time period.

Automatically investing small amounts regularly, over time results in a sound strategy for wealth building. Acorns capitalizes on this premise and integrates regular investing activities into daily spending. 


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