More than 2.3 million people use Acorns in the United States
In November 2017, PayPal (PYPL) announced that it was introducing Acorns services to its customers. Acorns offers investing services in which users can invest their change from a purchase or fund their investment account through a one-time payment or recurring payments. More than 2.3 million people use Acorns in the United States. PayPal initially rolled out its Acorns feature to a small number of its US customer and promised that it would broadly roll out the feature to all its US customers by early 2018.
In addition to the relationship where they are tapping into each other’s platforms, PayPal is also an investor in Acorns. It made an investment of about $30 million in the business a year before it integrated the Acorns feature into its platform.
PayPal in deal-making spree
Acorns is one of the nearly two dozen companies that PayPal has either invested in or inked commercial deals with over the past two years. PayPal’s partners include big brands such as Visa (V), Mastercard (MA), Baidu (BIDU), and Facebook (FB), but there are also little-known ones such as Raisin.
Raisin is a Europe-based startup that operates a savings deposit marketplace. People can turn to Raisin’s marketplace to discover better interest rates on savings deposits. Raisin works with banks, and banks share information about the interest rates they award savers. Raisin users can thus discover savings deposit deals. Last year, PayPal invested in Raisin. TechCrunch reported that Raisin continues to expand its footprint, recently launching a dedicated marketplace for its UK users.
Investing or partnering with the likes of Acorns and Raisin seems to fit with PayPal’s ambition to go beyond its payment processor roots as a way to attract more customers and boost the retention of its existing ones.
PayPal funneled $667 million to capital investments in 2017, maintaining almost the same capital spending rate as the previous year when it made capital investments worth $669 million.