RZI Raiz Invest Limited

By Peter Rudegeair 

Acorns Grow Inc. plans to go public through a merger with a blank-check company in a deal that values the digital savings and investing app at about $2.2 billion, according to people familiar with the matter.

The Irvine, Calif.-based financial-tech company is expected to announce a combination with Pioneer Merger Corp., a special-purpose acquisition company affiliated with the hedge funds Falcon Edge Capital and Patriot Global Management, as soon as Thursday, the people said. As part of the transaction and a related private placement involving funds managed by BlackRock Inc., Wellington Management Co. and other investors, more than $450 million in proceeds will flow to Acorns's balance sheet, the people said.

Acorns automatically invests small contributions from users into baskets of stocks and bonds. It counts more than 4 million subscribers, most of whom pay $1 a month for the service, though Acorns also offers $3-a-month and $5-a-month options for additional features such as bank accounts or retirement plans. As of May, Acorns had $4.74 billion in assets under management, according to a recent regulatory filing.

Special-purpose acquisition companies, or SPACs, like Pioneer are corporate shells that raise money from investors and go hunting for a private company interested in taking both the shell's cash and its stock listing as an alternative to an initial public offering. SPACs have raised more than $100 billion in 2021, according to data provider SPAC Research. But share prices for many SPACs and the companies they have taken public have tumbled in recent weeks.

SPACs have become a popular outlet for financial-tech startups, with banking startup Social Finance Inc., real-estate platform Better Holdco Inc. and trading app eToro Group Ltd. all agreeing to multibillion-dollar deals with SPACs in recent months.

Write to Peter Rudegeair at Peter.Rudegeair@wsj.com

(END) Dow Jones Newswires

May 27, 2021 07:39 ET (11:39 GMT)

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