PayPal leads $30 million round in Acorns investing app

Acorns, the investing app, is announcing a $30 million strategic investment from PayPal, with participation from the Rakuten FinTech Fund. This brings the team’s total funding to $62 million.

With 850,000 investment accounts, Acorns works by rounding up purchases and investing the remainder. In other words, if you buy a latte for $3.99, that penny will go into an ETF.

Users trust Acorns with their credit card information, syncing it with the app for automatic investing. The startup highlights diversified portfolios containing stocks and bonds.

Targeting millennials, incoming CEO Noah Kerner says that with Acorns, “young people can keep growing their account in small amounts through lots of different sources,” adding that “with micro-investing, anyone can start growing wealth.”

About 75 percent of Acorns’ users are between the ages of 18 and 34. The app is free and fees are just a dollar per month for accounts under $5000 and .25% per year for accounts with more.

Mathias Schilling, general partner at e.ventures and investor in Acorns, says that “there is a massive opportunity to disrupt financial services with a mobile-only approach.” He says that the app educates young people about “the long-term benefits of investing.”

Based in Irvine, California, Acorns was started by a father and son, Walter and Jeff Cruttenden. According to son Jeff, in the first quarter “all our portfolios have outperformed the S&P on a risk-adjusted return basis.” Claims Cruttenden, “it’s the fastest growing investment app ever.”

Yet without more specificity on returns, it’s hard to know if it’s a great investment strategy. But it’s certainly an easy one.