{"id":34816,"date":"2023-10-20T14:35:10","date_gmt":"2023-10-20T14:35:10","guid":{"rendered":"http:\/\/startupsmart.test\/2023\/10\/20\/acorns-ready-to-crack-open-micro-investing-market-in-australia-startupsmart\/"},"modified":"2023-10-20T14:35:10","modified_gmt":"2023-10-20T14:35:10","slug":"acorns-ready-to-crack-open-micro-investing-market-in-australia-startupsmart","status":"publish","type":"post","link":"https:\/\/www.startupsmart.com.au\/uncategorized\/acorns-ready-to-crack-open-micro-investing-market-in-australia-startupsmart\/","title":{"rendered":"Acorns ready to crack open micro-investing market in Australia – StartupSmart"},"content":{"rendered":"
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Australia is about to see the dawn of micro-investing with the impending launch of US startup Acorns<\/a>, and co-founder Walter Cruttenden says it could be even more popular here than in America.<\/p>\n

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Australia will be the first country outside of the US to be able to use Acorns\u2019 micro-investing platform with a beta phase beginning in November, before the official launch in January.<\/p>\n

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The reaction in Australia has already been overwhelming, Cruttenden tells StartupSmart<\/i>.<\/p>\n

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\u201cWhat we\u2019ve seen in sign-ups is that it has actually been a little faster than what we had in the US, and we had a super successful beta and launch in the US,\u201d he says.<\/p>\n

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\u201cWe\u2019re very pleased with that.\u201d<\/p>\n

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An electronic piggy bank in your pocket<\/b><\/h3>\n

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Acorns is a smartphone app that allows users to invest electronic \u2018spare change\u2019 in five diversified portfolios. It can automatically take the leftovers from small daily transactions and invest them.<\/p>\n

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So for a coffee that costs you $3.40, this would be rounded up to $4 and 60 cents would be invested.<\/p>\n

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Users can also set a recurring investment outside of this, and contribute lump sums whenever they want.<\/p>\n

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This new form of micro-investing, facilitated and simplified by technology, is set to be a major global trend, and Acorns is at the forefront of it, Cruttenden says.<\/p>\n

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\u201cMicro-investing is going to be a huge trend. It\u2019s making it easy for a lot more people to invest,\u201d he says. \u201cIt\u2019s an area for people to watch, and it\u2019s going to spread around the world. It\u2019s nice to see Australia adopting it first.\u201d<\/p>\n

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\u201cMicro-investing has the ability to do all these wonderful things through investing in the background of your life, and it opens up a whole new demographic.\u201d<\/p>\n

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The first international expansion<\/b><\/h3>\n

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Acorns has enjoyed huge growth and success in the US market since it launched a little over a year ago. Users have saved over $US25 million through the platform, and it now boasts over 700,000 members, a number which is growing by about 100,000 month-on-month.<\/p>\n

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Cruttenden says they\u2019ve received attention and requests from \u201cevery major country\u201d but centred on Australia for its first expansion.<\/p>\n

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\u201cWe launched a little over a year ago in the US and it just went ballistic,\u201d he says. \u201cIt wasn\u2019t more than a month or two after the launch that the international interest started to come in.\u201d<\/p>\n

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It\u2019s all about Australia\u2019s similarities with the US, both in terms of business and culture, he says.<\/p>\n

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\u201cWe decided to be very careful and deliberate and to start in a country that we can really relate to. That\u2019s why we\u2019re starting with Australia,\u201d Cruttenden says.<\/p>\n

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\u201cThis is the dawn of micro-investing. It looks like it\u2019ll be as successful as it was in the US. Proportionally you guys have signed up faster than in the US.<\/p>\n

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To facilitate a quick and painless expansion Acorns have partnered with local financial firm Instreet Investments<\/a> to create a joint venture where all the profits will be split 50\/50.<\/p>\n

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This has helped immensely with navigating the regulatory minefield, Cruttenden says, and made a process that took nearly two years in the US much shorter.<\/p>\n

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\u201cWe were doing a new and novel thing in the US,\u201d he says. \u201cIt didn\u2019t take us that long in the US because Instreet already had the basic licences.\u201d<\/p>\n

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\u201cIf we went down there and set up our own shop and had to start from scratch in getting the licences, it would\u2019ve taken well over a year. We didn\u2019t want to wait that long because it\u2019s a terrific product and we\u2019re getting demand from all over the world.\u201d<\/p>\n

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Local competitors<\/b><\/h3>\n

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Acorns will encounter some local competition though, with some Australian startups also utilising the concept of electronic spare change.<\/p>\n

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SnapSave takes this money<\/a> and transfers it to a savings account. FirstStep also operates<\/a> in much the same way as Acorns, investing the change in a range of portfolios.<\/p>\n

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Acorns will be charging \u201cless than $2\u201d per month for accounts with less than $5000, while FirstStep will instead by taking a 1% fee per year for accounts under $2000. The Australian startup is aiming to launch early next year as well, but will find the going tough with the big international player setting up shop before then.<\/p>\n

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Acorns is well ahead of the pack, Cruttenden says.<\/p>\n

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\u201cThere are a lot of similar situations in appearance,\u201d he says. \u201cWe don\u2019t know of anyone that has built the micro-investing platform and engine.<\/p>\n

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\u201cThat\u2019s our secret sauce.\u201d<\/p>\n

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The micro-investing concept is firmly targeted at a young market that would not normally invest.<\/p>\n

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\u201cIt\u2019s primarily a millennial market for first time investors,\u201d Cruttenden says. \u201cWe\u2019re offering it by breaking the increments down to tiny, spare change that you can get started with.\u201d<\/p>\n

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\u201cThat\u2019s something that naturally appeals to young people, and people that don\u2019t like to deal with a lot of stress.\u201d<\/p>\n

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The recent market volatility and crashes will only serve to push people towards smaller forms of investing like Acorns, Cruttenden says.<\/p>\n

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\u201cOur product is perfect for this,\u201d he says. \u201cWhen people get concerned and the market takes a bit of a dip, they don\u2019t want to commit lump sums until things are better.\u201d<\/p>\n

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\u201cWhen you have an automatic investment tool you\u2019re buying in all kinds of markets and not missing out.\u201d<\/p>\n

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Both sides of the fintech equation<\/b><\/h3>\n

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The fintech startup scene is expanding rapidly in Australia and around the world, and Cruttenden says the secret is to ensure your team has both the tech and the financial side of the equation.<\/p>\n

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\u201cThose fintechs that have a mix of people from the financial services industry as well as the tech industry are the ones doing better than those with just the tech guys or just the financial guys,\u201d he says.<\/p>\n

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Cruttenden brings decades of experience on the financial side, and he found his own son, Jeff, to contribute the coding side of things.<\/p>\n

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The father-and-son pair launched the startup eventually last year, and Cruttenden says it paid to wait until it was perfected.<\/p>\n

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\u201cWe delayed the launch several times because the design wasn\u2019t perfect,\u201d he says. \u201cIt got to the point internally where we were just saying \u2018get the thing out\u2019, but my son was adamant about the design, and he turned out to be right.\u201d<\/p>\n

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\u201cCompanies like Apple have proved that it\u2019s not enough to just have a box that computes. You have to have a beautiful way of going it that makes it easy for the users.\u201d<\/p>\n

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The duo make a great team, Cruttenden says, and there\u2019s only one slight problem.<\/p>\n

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\u201cThe only difficulty is turning it off when we\u2019re at home having dinner,\u201d he says.\u201d<\/p>\n

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\u201cWe tend to work a little too much.\u201d<\/p>\n

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Want to grow your business with Instagram? <\/i>StartupSmart School can help<\/a><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"

Australia is about to see the dawn of micro-investing with the impending launch of US startup Acorns, and co-founder Walter<\/p>\n","protected":false},"author":2,"featured_media":62313,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/34816"}],"collection":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/comments?post=34816"}],"version-history":[{"count":0,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/posts\/34816\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media\/62313"}],"wp:attachment":[{"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/media?parent=34816"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/categories?post=34816"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.startupsmart.com.au\/wp-json\/wp\/v2\/tags?post=34816"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}