BlackRock Deepens Wealth Management Push With Deal Backing Startup

The asset manager has become an anchor investor in Acorns, a fintech startup with venture capital backing from Bain, TPG, and Ashton Kutcher.

Michael Nagle/Bloomberg

Michael Nagle/Bloomberg

BlackRock has bought a stake in Acorns, a startup that offers an app for ordinary savers, in a deal giving the world’s largest asset manager closer ties to the wealth management industry.

The partnership with Acorns, which automatically invests “spare change” from everyday purchases into a portfolio of exchange-traded funds, will help inform BlackRock’s creation of investment offerings, according to a statement Wednesday from the asset manager. Without disclosing terms of the deal, the firm said it’s now an anchor investor in the startup.

BlackRock, which oversees $6.3 trillion of assets, is moving deeper into automated savings as individual investors increasingly shoulder the burden of managing their own retirement accounts. Acorns, which began offering its micro-investing app in 2014, now has more than 3.3 million investment accounts.

“Acorns is a pioneer in creating innovative ways to engage investors in a mobile-first world,” Rob Goldstein, BlackRock’s chief operating officer, said in the statement. “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.”

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Acorns’ customers invest in low-cost ETFs offered by asset managers such as Vanguard Group and BlackRock. They can choose one of five portfolios that were built with the help of Nobel Laureate economist Harry Markowitz, according to the statement.

“This partnership supports our shared ambition to put the tools of wealth-making in everyone’s hands,” Noah Kerner, chief executive officer of Acorns, said in the statement.

Founded by Walter and Jeff Cruttenden, Acorns’ venture capital backers include Bain Capital Ventures, TPG, and PayPal, according to the financial-technology firm’s website. Actor Ashton Kutcher and professional basketball player Kevin Durant are also among the startup’s investors.

As an anchor investor, BlackRock will have an observer seat on the company’s board of directors, according to the statement. The position will be filled by Frank Cooper, BlackRock’s chief marketing officer.

“Through micro-behaviors the next generation of investors can take achievable steps towards building their well-being,” Cooper said in the statement.