Jennifer Lopez and Alex Rodriguez are the two latest celebrities to invest in fintech company Acorns Grow Inc., joining other big-name stakeholders like Ashton Kutcher and Kevin Durant.
Other companies like PayPal, BlackRock and NBCUniversal have also bought stakes in the business, The Wall Street Journal reported.
Acorns says its customers can invest their “spare change” by rounding up debit card purchases and setting aside the leftover amount.
Noah Kerner, Acorns’ CEO and a onetime DJ for J-Lo, is behind the influencer strategy, the Journal reported. He’s trying to grow the company from a niche savings app into a banking alternative with 100 million customers.
“Our focus is getting everyday Americans saving and investing for the future … in the hopes that we help the next Kevin Durant or Jennifer [Lopez] get there,” Kerner told the Journal.
Attracting those everyday customers may be a difficult task as Acorns is competing in a crowded field. Plus, most big banks have similar tools to those offered by Acorns since Bank of America launched its “Keep the Change” program more than a decade ago, according to the report.
The difference that could set Acorns apart is that its debit card comes with no ATM fees, overdraft fees or minimum balance requirement. Instead, the company charges between $1 and $3 per month “until you have $1 million invested,” depending on the services a user wants.
“To approach everything from a place of mission and integrity — that’s a big innovation in financial services,” Kerner told the Journal. “I don’t think there’s a better example of an industry that needs to be reimagined from the ground up.”
Kerner likened the small monthly fee to a subscription.
“I believe in subscription models,” he told the Journal. “You should be able to charge for a product that you make. The customer could decide if they want to pay or not.”
Those monthly fees are where most of Acorns’ revenue comes from, according to the report. The company has grown from about 220,000 accounts to more than 5 million, with about half the customers actively saving and investing, since Kerner became CEO in 2015.