April 4, 2023: American micro-investing application Acorns acquired GoHenry, a digital banking startup that educates kids about money, for an unknown sum.
The company told exclusively that it agreed to an all-stock agreement with GoHenry that will witness the company become a wholly owned subsidiary of Acorns, with workers and backers of GoHenry rolling over their equity.
Founded in 2012, GoHenry provides a spending card for children aged six to 18, connected to an accompanying money management app. Parents can follow their kids’ transactions in real-time and set spending limits or savings goals.
The deal’s timing is noteworthy. The fintech sector is enduring a challenging environment characterized by high inflation and increased interest rates. That’s dented sentiment all over the market, with many publicly-listed firms’ share prices decreasing. This knocked on privately-held fintech, with many late-stage companies witnessing their valuations drop sharply.
Therefore, Noah Kerner, Acorns’ CEO and co-founder, insisted market conditions did not affect the acquisition timing as talks between the two firms started as early as 2021.
Acorns looked at over 100 deals globally before landing on GoHenry, Kerner said, which added a $55 million cash infusion into GoHenry the previous year, and its buyout of rival company PixPay in France made the agreement more attractive.
Rather than offering a free service which makes money from interchange fees, GoHenry charges parents for a subscription based on per month, which it states pays for elements like the ability to set up paid chores and parental rules.
Acorns again focuses on assets, which lets customers automatically invest spare transfers from card payments into index funds.
Acorns charges a monthly subscription fee. The firm stated that it now has a combined 6 million subscribers after it acquired GoHenry.
Despite this, Acorns’ acquisition of GoHenry shows a major growth bet for the firm, which has up until now only been known in the U.S. By buying GoHenry, it will be given access to Europe. This market is less advanced when it comes to retail investing.
GoHenry has ideas in the U.K., France, Spain and the U.S. The GoHenry app will be named after GoHenry by Acorns in U.S. GoHenry will still be given the name GoHenry in the U.K., while its current name in France and Spain, known as PixPay, will remain the same.
Acorns is valued at $1.9 billion in the previous year in a $300 million funding round after scrapping projects to go public via a merger with a particular purpose acquisition company or SPAC due to volatile market conditions.