US-based savings and investing startup Acorns has acquired London-based Gohenry, a startup focused on providing money management and financial education services to 6-18 year olds on an equal footing, the two companies announced today.
The combined value of the company, as well as additional financial terms, were not disclosed. When Acorns last raised funding, $300 million in March 2022, it was valued at $2 billion. GoHenry did not disclose its valuation, but believes it will be worth between $250 million and $500 million by October 2022, when it has raised $55 million.
The purchase is notable for two reasons. One, if the companies can maintain their valuations (valuations have seen a lot of pressure over the past six months), one of the biggest M&A deals between two fintech startups will come when the startups acquire them. Very challenging to raise additional funding – from private investors or public markets through an IPO.
Secondly, it adds several new supporters to the Acorns’ cap table. GoHenry investors include Edison Partners, Revaya, Citi Ventures, Moses Capital and Nexi, are all. Roll on their equity in the agreement.
Finally, this gives Acorns an opening to grow internationally, starting with GoHenry’s existing footprints in the UK, France, Italy and Spain.
The companies would not provide details on individual metrics, saying it has about 6 million subscribers. Previous TechCrunch coverage helps us break down the mix, but it also suggests either or both that we’ve lost some users in the recent past. In March 2022 CEO Noah Kerner told TechCrunch that the company has Over 4.6 million paid subscribers. Gohenry It said it had 2 million customers last October.
Since 2012 Acorns It has raised over $500 million alone from investors such as private equity firm TPG, BlackRock, Greycroft, Owl Rock (a division of Blue Owl), Senator Investment Group, Torch Capital, Industrial Ventures, Bain Capital Ventures, Galaxy Digital, Title and Kevin Durant. & Wealthy Clayman Thirty Five Ventures.
Acorns is coming to this deal after it previously faced setbacks in its own exit plans. The company originally intended to go public and plans to do so in 2021 through a SPAC. At that time, it was understood from the description of the ship that the revenue of 126 million dollars was planned for the year. Analyzed by our own Alex Wilhelm. But with the SPAC market struggling, and the tech IPO market drying up at the end of 2021, Acorns He canceled the SPAC IPO plans. In January 2022.
Gohenry (named after its first child-client, according to the company) has raised a total of $125 million since its inception in 2012. It posted revenue of $42 million in 2021 (last year ended), more than double what it made. 2020.
Neither Acorns nor Gohenry – both 10 years old – were yet to be profitable in their last breeding season.
Acorns initially targeted young adults, particularly millennials, before later opening its first service to children. GoHenry will help it expand in that market segment. Since its early days, GoHenry has focused on 6- to 18-year-olds, who currently use the company’s two main services: a prepaid debit card (typically topped up by a parent) and a “financial education” app that connects to that card and parents can use to monitor and manage the account. app you can). Until last summer, Gohenry worked in the UK and the US, where it expanded in 2018. It also started serving in France and Spain. French startup has acquired Pixpay It opened for business in Italy last July and January.
Acorns has expanded its offering to include investment services, debt management and a product aimed at children. Acorns early Started in June 2020. Acorns Early It allows parents, guardians, family and friends to easily invest in a child’s future. Before Gohenry, Acorns had it too. obtained Vault, Harvest Platform and Pillar.
The combination of executives from the two companies will enable the company to serve clients at all stages of life – from birth to retirement. Acorns says it has helped Americans save and invest more than $16 billion since its inception, and Gohenry clients have saved $130 million over the past five years. The acquisition now puts Acorns in direct competition with other US-based finches that offer debit cards for children and/or teenagers, including Greenlight, Step and Current.
“We’ve both been thinking about this idea of financial security for the whole family for a long time,” Kerner told TechCrunch in an interview, noting that the companies had been in talks for two years. “So it’s exciting to be able to serve children, youth and adults globally in one company.”
GoHenry co-founder Louise Hill said she was “excited about the opportunities” the merger would open up.
“It’s a shared vision/mission, looking out for the benefit of the family, and what’s coming up – everyday people,” she said in an interview. “It’s exciting to be able to expand and offer a similar approach to financial security for adults.”
The combined company – both offering subscription services – has more than 700 employees. While the deal was primarily equity, Hill said there was “a little bit of financial consideration” that came out of “management necessity more than anything else.”
The decision to acquire GoHenry was not an easy one, Kerner said, adding that Acorns has evaluated “over 100” companies globally.
“We’ve focused on the US market with our products, but we’ve always had ambitions to offer globally,” he told TechCrunch. “This will allow us to speed up the process.”
According to Hill, Gohenry always had the goal of globalization.
“Our teams have been talking together for over two years, and it’s becoming increasingly clear that the right path is to come together,” she said.
In the US, GoHenry operates as GoHenry in Acorns. In the UK and Europe, GoHenry and PixPay will continue to operate under their own brands.
As the IPO market dried up, there were many industry observers. He predicted that The fintech space is seeing further consolidation. And so far in 2023, we have seen several M&A deals.
For example, earlier this year Marketa announced plans to get A two-year fintech infrastructure startup Energy finance for $223 million in cash, the first acquisition in the 13-year history of a publicly traded company. Also in January: Investment giant Blackrock announced Getting a minority stakeE in SMB 401(k) provider startup human needs; Start of remote payment Share Acquired fintech Capbase; Loyalty Earned Equity Management Startup Shoobx; Vouch, an insurance focused on startups; The initial level of credit obtained And American Express made a deal To find Nipendo.
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