Acorns Cancels Its $2.2 Billion Plan to Go Public

Investing app Acorns has pulled the plug on its plan to go public through a $2.2 billion SPAC deal with blank-check company Pioneer Merger Corp.

Noah Kerner, CEO of Irvine-based Acorns, blamed “market conditions” for the canned merger, and said the company would instead pivot to a “private capital raise at a higher pre-money valuation,” per a Reuters report.

As it now looks to the private market to raise money to fund its growth, Acorns must also pay Pioneer a $17.5 million breakup fee over the course of the year.

Acorns was among several Southern California-based fintech firms that have turned to SPACs, or special purpose acquisition companies, as an expedited route to the public market. West Hollywood-based banking app Dave listed on the Nasdaq via a SPAC deal earlier this month, while Marina del Rey-based eco-conscious neo-bank Aspiration plans to seal its SPAC merger by the end of the first quarter.

SPAC deals have exploded in popularity in the past few years—and while they can offer a speedier and cheaper alternative to traditional IPOs, they often perform worse and have attracted scrutiny from securities regulators. Local firms like Bird and Sweetgreen have found their stock struggling in the wake of their SPAC deals.

Acorns was founded in 2012 and has since grown to more than 4.6 million paid subscribers who use its online investing and banking services.