Popular micro-investing appAcornsis launching a rewards program called “Found Money,” which will give its users bonus investment cash when they shop at brand partners like Jet.com, 1-800-Flowers, and Hotel Tonight.
In April, Acorns saw a big investment from industry giant PayPal, which contributed the majority of a $30 million round that brought Acorns’ total funding to $62 million. Acorns’ basic strategy is using ETFs and an attractive mobile interface to narrow the investing decision for users down to two questions: “how much” they want to invest and “how much risk” they want to take.
The new program works much like a credit card reward system, but instead of cash back, users get money put directly into their Acorns investment account.
CEO Noah Kerner says the new initiative fits into Acorns’ broader goal of allowing investment to automatically happen in the background of its customers’ lives. One of Acorns’ core strategies has been building up account balances using “round-ups.” Acorns can monitor purchases on its users’ credit and debit cards and invest the difference – if someone spends $8.46 on lunch, Acorns can invest the $0.54.
“Found Money” is one more avenue for Acorns to draw funds from. Here is a list of brands participating in the launch, along with the benefit they are offering:
- 1-800-Flowers: $15 for every transaction over $20.Jet.com: 5% of each transaction.JackThreads: $15 for signing up as a new customer.Dollar Shave Club: 10% of each transaction.Hotel Tonight: $10 for every booking over $100.
Kerner says the brands are footing 100% of the bill for these rewards. So what’s in it for them? Kerner explains that in a test run with 1-800-Flowers for Mother’s Day, the brand saw a 100% growth rate for Acorns customers. And a spokesperson for Jet.com said the idea of helping customers invest in their future appealed to the company.
Acorns has opened 900,000 investment accounts, 75% of which belong to millennials. The service costs $1 a month for accounts less than $5,000, or 0.25% of account assets a year on those over that. But if you are a student, or are 18 to 23 years old, it is free.