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US savings app Acorns raises $300m in funding after abandoning SPAC plans

Savings and investing app Acorns has raised $300m in a Series F funding round that values it at almost $2bn after scrapping SPAC plans earlier this year.

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Acorns, a US fintech startup, has managed to raise $300m in a Series F funding round that values the company at almost $2bn.

This comes after the savings and investing app scrapped plans for a $2.2bn SPAC merger with Pioneer Merger Corp. (Pioneer) earlier this year.

The app had said in May last year that it had plans to go public through a merger with the blank cheque company, but changed its mind six weeks ago.

Acorns Chief Executive Officer Noah Kerner told CNBC: "The markets got very volatile."

"The concerns we had about the [SPAC] market were that we would get lumped into a group of companies that perhaps were valuing themselves in inflated ways."

Though Acorns still intends to go public in the future, the firm has said it will list via the traditional IPO route instead.

Launched in 2014, the Acorns app now has more than four million paid subscribers and allows users to set up automated investments into a portfolio by rounding up debit or credit card purchases to the nearest dollar and investing them on the user’s behalf.

It has now more than doubled its valuation since its last private fundraise — a $105m Series E round at an $860m valuation over three years ago.

The Series F round was led by private equity firm TPG and included BlackRock, Bain Capital Ventures and Galaxy Digital.

After ending the deal with Pioneer, Acorns will have to pay $17.5m cancellation fees in monthly instalments until December 2022.

Acorns is not the only fintech company to have abandoned SPAC plans.

Cloud-based software platform ServiceMax mutually terminated a $1.4bn SPAC deal at the end of last year. 

Kin Insurance also ended its deal with Omnichannel Acquisition Corp. earlier this year and raised $82m in a Series D round of funding last week.

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