For Acorns CEO Noah Kerner, his company's mission is clear: help educate its users on how to invest--using their own spare change.
Acorns model is simple. Users sign up for the company's app and link their credit cards to their Acorns account. Every time a user makes a purchase, the amount is rounded up to the next dollar, with the extra change being deposited into the user's Acorns account. This accumulated amount is then automatically invested into a diversified portfolio of ETFs, with Acorns recommending one of its six investment portfolio offerings depending on the users' goals.
The entire process is simple, streamlined and painless for users, but according to Kerner, it can add up to big bucks saved every year; the CEO says that the average user can easily save between $300 and $600 annually without even noticing.
Of course, this round-up investment service is something that's being increasingly offered by the big banks as well--so what makes a Fintech startup like Acorns stand out? For those who follow the company in the news, their roster of celebrity investors--including actress/singer Jennifer Lopez, former baseball player Alex Rodriguez and U2 frontman Bono--may be the most eye-catching differentiator.
Kerner also refuted the common assertion that his company's product is really only aimed at a younger millennial audience: Acorns’ user base is “18 to 98...we skew a little younger, but our customers really run the gamut across all ages.”
Kerner thinks that his company's differences go deeper, though. He points out that a typical big bank or financial institutions "serves up products to you," whereas "everything [Acorns does] orients around helping people save and invest money." For example, Kerner highlights Acorns Spend, the company's recent introduced debit card that he says can help users save, invest and earn.
"Everything is: how to do we help people save and invest as much as possible and not just give people products they may not need," Kerner told Yahoo Finance's Julie Hyman, Adam Shapiro, Rich Newman and Sibile Marcellus.