BlackRock Partners with Acorns Micro-Investing App
It seems that BlackRock has taken an interest in the opportunities micro-investing presents. This week the world’s largest asset management firm announced a partnership with the FinTech company Acorns, leading a $50 million round for the app. Together, the two now plan to “pursue new technology-enabled tools for Acorns’ users.”
If you aren’t familiar, Acorns is a finance app that allows users to invest their spare change. By “rounding up” transaction made on selected credit and debit cards, Acorns sets aside funds for users, which are then used to invest in a mix of ETF, stocks, and bonds. With buy-ins as low as $5, Acorns has been successful in attracting non-traditional investors and currently boasts more than 3.3 million investment account holders.
In a press release announcing the newly-formed partnership with Acorns, BlackRock COO Rob Goldstein said, “Acorns is a pioneer in creating innovative ways to engage investors in a mobile-first world. By deepening our understanding of how their customers use investment technologies, we can apply those learnings across BlackRock to evolve the products we build for our distribution partners.” Meanwhile Acorns CEO Noah Kerner said, “This partnership supports our shared ambition to put the tools of wealth-making in everyone’s hands. We wake up every day and think about how to help Americans build a better future. After reading ‘Larry’s Letter,’ I can’t think of a better collaborator on this journey.”
The letter Kerner is referring to was one sent by BlackRock founder Larry Fink addressed to CEOs everywhere. In the open letter, he wrote (among other things), “[M]any individuals across the world are facing a combination of low rates, low wage growth, and inadequate retirement systems. Many don’t have the financial capacity, the resources, or the tools to save effectively; those who are invested are too often over-allocated to cash.” Incidentally, Acorns recently launched their Acorns Later product, which is intended to help users save and invest for retirement.
For BlackRock, the partnership with Acorns would appear as a play to attract today’s micro-investors and hopefully grow them into customers of BlackRock’s other investment products. As for Acorns, the vote of confidence from BlackRock shows that micro-investing is actually a viable idea and not just a flash in the pan. With that, the relationship between the two seems like a win-win. Moreover the deal is good news for FinTech as BlackRock continues their pursuit of nurturing emerging technology and investing in the financial tools of tomorrow.