Did you ever think spare change could be so valuable? Acorns is a California based startup which allows people to invest their spare change and recently announced it is going public, via a SPAC (Aka blank cheque company).
The deal is worth 2.2bn on revenue of $126MM projected for 2021, and has an implied enterprise value to revenue multiple of 12.7x. By comparison, Netflix is at 8.7x, Facebook at 9.3x and BlackRock at 8.1x
Here are the top 4 learnings for ambitious entrepreneurs:
(1) Be thematically positioned within the right space. Acorns is in the Wealth Management industry, which is going though seismic change and disruption such as robo advisory, increasing customer flexibility, growing services and products.
(2) Serve an unmet need. Acorns focused on meeting the needs of those with just spare change and little time, at a time when existing wealth managers focused on growing assets under management and meeting the needs of wealthier clients.
(3) Have a product which is really, truly easy to use. This is critical to getting traction. Acorns works really simply and offers a range of services. It opens up the investing world to anyone, even those with just spare change to invest.
(4) Build a diverse community of users. Whilst other wealth managers focused on building assets under management (AUM), Acorns actually has less AUM than competitors like Betterment, BUT it has more users at 4 million subscribers, with an average age of merely 34 years.