The aggressive push by microinvesting apps to diversify features is gaining momentum.
Acorns, which in July added Adam Dell’s Clarity Money as a personal finance management partner, announced the acquisition of a retirement savings tool provider on Wednesday.
Terms of the deal for Portland, Ore.-based Vault, the maker of an app that allows clients to automatically invest part of their paychecks into retirement accounts, were not disclosed.
The deal enables Acorns to offer a new feature, Acorns Later, which will take small amounts from users’ paychecks and deposit them into individual retirement accounts. The roundup app currently places micropayments from purchases into a portfolio of exchange traded funds.
Acorns CEO Noah Kerner said the acquisition was another step in addressing needs of millennial clients who have not been served by traditional wealth managers.
The app recently crossed the 2-million-user threshold, with average account size of $921 at the end of September, the firm said.
“A lot of people in our customer segment don't believe retirement is going to be a possibility for them in the future,” Kerner said.
It’s important to demonstrate that saving for retirement is possible, Kerner added. “It’s hard to get people to change behavior.”
Acorns’ announcement follows a similar retirement savings feature announced by Stash Invest. Megabanks in recent weeks have also announced their own millennial-focused apps, with JPMorgan Chase and Wells Fargo introducing mobile-only banking options that also serve up PFM insights.
As part of the deal, Los Angeles-based Acorns will open an office in Portland, Ore. The firm expects to hire more than a dozen engineers in the next year to support its product development strategy.
Acorns Later is expected to roll out in January.