Jennifer Lopez, Alex Rodriguez Are Investing in Fintech Firm Acorns

Acorns Grow

RZI 4.44%

wants to go viral. It has enlisted A-Rod and J.Lo to help.

Alex Rodriguez


Jennifer Lopez

are buying a stake in the California-based company, Acorns said Monday, joining an investor base that includes

Ashton Kutcher,



Kevin Durant.

Acorns doesn’t just want celebrities as investors—it is also talking to some of them about designing financial products tailored to their interests.

The influencer strategy is the brainchild of Acorns Chief Executive

Noah Kerner,

a onetime DJ for Ms. Lopez and a former head of marketing at WeWork Cos. He is trying to transform Acorns from a niche savings app that invests users’ spare change into a bank alternative used by 100 million consumers.

“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,” Mr. Kerner said.

Acorns’ headquarters in Irvine, Calif. The company’s CEO says Acorns offers a simple set of products that don’t charge overdraft or other punitive fees.


Patrick Strattner for The Wall Street Journal

Acorns and other fintech startups have raised billions of dollars in venture capital and won over early adopters open to trusting unproven companies with their financial lives. What they haven’t done, apart from maybe Venmo, a digital-money transfer service, and


’s Cash App, is gone mainstream.

It is a tough sell for one big reason: The products they are offering aren’t unique. A dozen years ago,

Bank of America

introduced its “Keep the Change” program, rounding up debit-card users’ purchases to the nearest dollar and transferring the difference into a savings account. Most big banks have launched their own versions of a tool Acorns and other robo-advisers built that automates investing and rebalances portfolios across different funds.

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With the environment becoming even more competitive—companies as diverse as

T-Mobile US



now offer some form of bank account—Acorns and other newcomers are turning to old-fashioned marketing tactics to attract users.

Online lender Social Finance Inc. is in talks to spend hundreds of millions of dollars on the naming rights to a new National Football League stadium in Los Angeles, according to people familiar with the matter. Robinhood Markets Inc., a stock-trading app, sent out nearly 5 million pieces of mail to prospective customers in the past year and a half, according to Comperemedia Omni data analysis.

Mr. Kerner said that what separates Acorns from other companies in the industry is a simple set of products that don’t charge overdraft or other punitive fees.

Details in the office of Acorns CEO Noah Kerner, a onetime DJ for Jennifer Lopez, in Irvine, Calif. Under Mr. Kerner, Acorns has grown from around 220,000 accounts to more than 5 million.


Patrick Strattner for The Wall Street Journal

“To approach everything from a place of mission and integrity—that’s a big innovation in financial services,” Mr. Kerner said. “I don’t think there’s a better example of an industry that needs to be reimagined from the ground up.”

Mr. Kerner’s foray into financial services came more than a decade ago, when

JPMorgan Chase

& Co. hired a marketing and product-development agency he led to help design and promote a new credit card pitched as a way to help college students improve their finances.

Manning Field, a former director of marketing at Chase and Acorns’ current operations chief, said other companies the bank interviewed suggested sponsoring Blink-182 concerts and skateboarding events on college campuses. Mr. Kerner, he said, proposed advertising the Chase+1 accounts on Facebook, then an under-the-radar social network popular on college campuses.

Still, Mr. Kerner, whose previous clients included Vice Media and Vitaminwater, was new to the world of banks and how they make money. While Chase+1 offered features such as reward points for taking credit-education courses, it carried an interest rate in the double-digits for unpaid balances. Mr. Kerner said he didn’t grasp the conflict until he read about it in a magazine article about the card in which he was quoted.

Group photos of Acorns teams at the company headquarters. About 60% of Acorns users are under the age of 35.


Patrick Strattner for The Wall Street Journal

“As embarrassing as it sounds now, I didn’t actually understand that,” Mr. Kerner said. “I got behind this thing and believed in it and created it. It wasn’t exactly what I thought it was.”

Mr. Kerner brought those lessons with him to Acorns, where he became CEO in 2015.

Under Mr. Kerner, Acorns has grown from around 220,000 accounts to more than five million, though only about half of those customers are actively saving and investing. About 60% of Acorns users are under the age of 35, and a third of the roughly 700,000 retirement accounts it has opened since April 2018 went to individuals who hadn’t previously had one, the company said.

That user base has attracted big names to Acorns.

PayPal Holdings




t Corp.’s NBCUniversal have bought stakes in the startup in part to reach and learn more about younger investors.

Acorns’ headquarters has a ‘Grow your oak’ wall. Most of the company’s revenue comes from fees it charges users to maintain accounts.


Patrick Strattner for The Wall Street Journal

Acorns also earns tens of millions of dollars annually from deals it struck with


, Dollar Shave Club Inc. and around 350 companies that agreed to invest money in the accounts of Acorns users if they shop at those retailers.

Most of the company’s revenue comes from fees it charges users to maintain investment and bank accounts, which range from $1 to $3 a month depending on how many services they use.

It is a tactic that many banks tried and failed to get their customers to stomach. When Bank of America proposed charging a $5 monthly fee on debit cards in 2011, a backlash from consumers and politicians forced it to scrap the idea.

“I believe in subscription models,” Mr. Kerner said. “You should be able to charge for a product that you make. The customer could decide if they want to pay or not.”

Write to Peter Rudegeair at

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