Massively popular investment and savings app Acorns has acquired New York based Pillar, an artificial intelligence powered startup built to help consumers manage student loan debt, in Acorns second acquisition of 2021 and both companies have declined to reveal the financial terms of the agreement. Pillar helps consumers optimize their debt payments by honing in on their dreaded student loans. The company launched in May of 2019 after a seed funding round led by Kleiner Perkins and others put up US $5.5 million. Pillar has managed over US $500 million worth of student loan debt from more than 15 thousand borrowers. Michael Bloch, Pillars founder, left this message on Pillars website, “Our team has joined Acorns as of March 2021 and are now back building products that help people achieve financial well-being. I want to personally thank you for being a Pillar customer. Your feedback and suggestions helped our team build an amazing tool that has helped thousands of families across the world. Thank you for giving us a chance and for trusting us to help you in your financial journey.”
Mr. Bloch left Stanford Business School and co-founded Pillar when he and his wife had accrued over US $500,000 in student loan debt after she had completed law school. Before, Mr. Bloch had led California and New York regions for DoorDash, an online food ordering, and food delivery platform, growing both to over US $100 million in revenue. He was aiming even bigger with Pillar by trying to tackle US consumer student loan debt that stands at a whopping US $1.7 trillion across over 45 million borrowers. It is the second-largest type of consumer debt in the States.
Acorns was one of many companies that had contacted Pillar about an acquisition deal. “We were in a pretty lucky position to have a lot of interest from many of the top fintech companies that are out there,” Bloch said. “We had multiple offers on the table and Acorns was really our top choice just given how the business has been doing and the team, the culture and the mission.”
This deal marks Acorns second acquisition this year after acquiring Harvest, a fintech that has helped its client get rid of over US $4 million in debt last year, and third overall. Acorn also noted that this past quarter was its strongest in its history. Both the Harvest and Pillar teams will help Acorns put its product roadmap helping customers pay down debt in overdrive. Acorns Founder and CEO Noah Kerner said, “The IP and technology that the Pillar team created in debt management is really interesting to us when we think about how we scale our Smart Deposit feature. From a behavioral perspective, the best way to get somebody to save and invest is to enable them to set aside a piece of their paycheck as soon as it hits the account so that they don’t spend it. That feature has been really well adopted by our direct deposit customers,” Kerner said. “And so Michael and his team are coming in to help manage that feature, and also our bank accounts product. I think their past experience is going to be really useful for us to take what we have and help the team catalyze it further.”
“TechCrunch Is Now a Part of Verizon Media.” Tech Crunch, 7 Apr. 2021, techcrunch.com/2021/04/07/acorns-scoops-up-pillar-a-fintech-backed-by-kleiner-perkins.