PayPal leads investment in millennial investment start-up Acorns
PayPal, alongside Rakuten, has made an investment that helps millennial make investments by asking just two questions. Called Acorns, founded by Jeff and Walter Cruttenden, the idea is to make investing easy by boiling down the options to younger investors into “how much do you want to invest?” and “How much risk are you willing to take on?”
The $30m raised in this round takes the total investment in Acorns to $62m. And in this round, PayPal made the majority of the investment.
With Acorns you manage your account via mobile and it’s pretty inexpensive. They already manage 850,000 investment accounts and three quarters belong to millennials. Acorns fees are $1 a month for accounts holding less than $5,000 or 0.25% a year on those over that. And it’s free if you’re a student or aged 18-23.
So why is PayPal interested in this company? It’s all about the future. As the pricing shows, they like to get people in and involved and then retain them. It’s like they say, people are more likely to get divorced than change banks.
And once these young investors are tied in and active and trust Acorns they may well want more products. That’s where PayPal comes in. It would be a good idea to offer other financial products to this lucrative demographic.
Currently it’s only a US based company butbthey say they plan to branch out globally.