Savings and investing startup, Acorns, has acquired London-based fintech startup GoHenry in an all-equity deal. The acquisition is significant for a number of reasons, including its size as one of the larger M&A deals between fintech startups and the addition of new investors to Acorns’ cap table. The move gives Acorns an opening to grow its business internationally, starting with GoHenry’s existing footprint across Europe. This article examines the significance of the acquisition and what it could mean for the fintech industry.
The acquisition of GoHenry by Acorns is significant because it is one of the larger M&A deals between two fintech startups. Acorns is a US-based company that provides savings and investment products, while GoHenry is a UK-based fintech that offers online banking services for children and teenagers. The deal between the two companies is all-equity, which means that Acorns will issue new shares to the shareholders of GoHenry in exchange for their shares in the company.
Addition of New Backers to Acorns’ Cap Table
The acquisition of GoHenry by Acorns will add a number of new investors to the company’s cap table. This means that Acorns will have more people with a stake in its success and more resources to draw on. The deal will also bring in new expertise and knowledge, something that will be beneficial to both companies.
Opportunity for Acorns to grow internationally
By acquiring GoHenry, Acorns gains an opportunity to grow its business internationally, starting with GoHenry’s existing presence across Europe. This means that Acorns will be able to serve a broader customer base and potentially increase its revenues as a result. The deal will also allow Acorns to expand its product offerings and provide a wider range of services to its customers.
The combined company will have nearly 6 million subscribers, giving Acorns a wider customer base and more potential for growth. This means that the company will have a larger market to target and more potential for generating revenue.
Projected revenue and IPO plans
Acorns had projected revenue of $126 million for the year and an IPO in 2021 through a SPAC, but the company scrapped its SPAC IPO plans in January 2022. The acquisition of GoHenry provides Acorns with a new avenue for growth, which could help the company achieve its revenue goals.
Acorns targets younger adults, while GoHenry targets teenagers
Acorns initially targeted younger adults, while GoHenry has always focused on the age group between 6 to 18. The acquisition means that Acorns now has access to a consumer group that it did not previously have. The deal also puts Acorns in competition with other fintech companies that offer debit cards to children and teenagers, such as Greenlight, Step and Current.
The acquisition of GoHenry by Acorns is significant for a number of reasons, including the expansion of Acorns’ international footprint, the addition of new investors to its cap table, and the potential for growth and revenue. The deal also puts Acorns in direct competition with other fintechs that offer similar services. As the fintech industry continues to grow and evolve, we can expect to see more M&A deals and continued innovation in the sector.