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Steve Cohen’s venture fund is backing an investing app for millennials

Julia La Roche
Steve Cohen (Reuters)

Billionaire Steve Cohen’s family-office fund is backing a micro-investing startup that’s popular with millennials.

Acorns, an investing app that launched in August 2014 and now has more than 1.3 million investment accounts, received $2 million in funding from Point72 Ventures, the firm’s early-stage venture capital strategy.

Acorns currently has 200,000 daily active users. Approximately 75% of customers are millennials.

The app works by investing spare change from everyday purchases called “round-ups.” For example, if you buy an iced coffee for $3.46 that rounds to $4.00. That spare $0.54 in change gets automatically invested into a portfolio of ETFs.

Users can choose from five portfolios, ranging from conservative to aggressive. Users can also opt to set up a weekly or monthly recurring investment where a certain amount of money is pulled to be invested regularly.

“We hope that young people try to save and invest as much as they comfortably can and do it regularly. It’s super important,” Acorns CEO Noah Kerner told Yahoo Finance.


“They’ve made it incredibly simple for people to start investing. There’s a huge mental barrier for people to start investing, period. This is especially the case for people who don’t have a lot of net-worth to begin with. This really removes a great deal of the friction,” Point72 Ventures partner Pete Casella told Yahoo Finance.

Not only will young people be able to start to accumulate wealth, but they’ll learn something along the way.

“If someone starts investing frequently with small investments earlier in their life, they will not only benefit financially from compound returns and dollar cost averaging, but they’ll pay more attention and learn about the financial markets,” Casella said. “Long-term, that should benefit Point72 and the financial services industry because much more talent will be financially literate from a younger age.”

The Point72 investment will be used to grow the app’s Found Money rewards program, which debuted back in May. The program features brand partners such as Airbnb, Dollar Shave Club and Blue Apron. When an Acorns user spends money with those partner brands, those companies make a direct investment into the user’s Acorns investment account. For example, a customer who becomes an Airbnb host gets $50 after their first booking and guests can earn up to 1.8% of their booking subtotal. Acorns users can get $30 for signing up for Blue Apron and 10% for all their Jack Thread purchases and 10% when they spend more than $10 at Dollar Shave Club.

“Everybody’s doing cash back. This generation wants cash forward,” Kerner said.

According to Acorns, those partner brands have seen an uptick in customer loyalty from the millennial market.

Point72 will tap into its extensive network to open up relationships with brands and businesses that would resonate with millennials.

Julia La Roche is a finance reporter at Yahoo Finance.

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