Acorns partners with Airbnb to encourage micro-investing among millennials
Micro-investing application Acorns is looking to expand the breadth of its reach through a partnership that will allow Airbnb to invest in its users.
The partnership between the two companies, announced today, will bring the already-popular Acorns micro-investing platform onto the mobile devices of the many millions of Airbnb users who both host and book accommodations through its service. The alliance forged between the two millennial-focused companies could also spark a paradigm shift in the relationships that consumers have with the brands they interact with.
"Partnering is a win-win proposition for all involved and a natural extension of Acorns? commitment to making it easy for millennials to integrate investing into the background of their lives," said Manning Field, chief commercial officer at Acorns. "Brands benefit through increased visibility, engagement and affinity among millennial consumers.
"Customers benefit through direct contributions into their investment accounts, bolstering their long-term wealth through everyday purchases. Airbnb is used predominately by the Acorns demographic (and vice-versa), making it a natural fit as our newest Found Money partner."
Acorns works primarily by monitoring consumer spending behavior and rounding up individual purchases to the nearest dollar. The app then invests the difference in one of a number of exchange-traded funds, including giants in asset management such as Blackrock and Vanguard.
The partnership, however, will operate through Acorns Found Money service, which allows partner brands to reward customers with cash in their Acorns investment accounts when making transactions. The deal with Airbnb specifically calls for Airbnb hosts receiving $50 invested into their Acorns account when they host their first booking and Airbnb guests receiving 15 percent of their Guest Service Fee back into their Acorns account, provided they book the stay through the Acorns app.
The Found Money service allows brands to invest in its users
The app's popularity lies in part because it addresses the need to save and invest? one that consumers seem to have trouble with if left to their own devices? by taking the agency out of it. The service provides a low-impact avenue into investing, which is considered by some an abstract and taxing endeavor.
Airbnb is the latest brand to ally with Acorns, which counts among its brand partners rising companies such as meal delivery service Blue Apron and Walmart?s ecommerce arm Jet.com. The brands Acorns generally partner with tend to be millennial facing, indicating a focus on long-term growth within the company.
And the Found Money rewards program indicates a subtle shift in the way that brands choose to interact with their consumers: instead of providing money back or discounts like traditional rewards programs, the Found Money program invests in its users, broadcasting an interest in the consumer outside of purely transaction.
Various brand partners of Acorns' Found Money service
The partnership comes at a time of significant boom within the crowdsourced accommodation sector. Internationally, the ?Airbnb of China,? Tujia, acquired competitor mayi.com to consolidate its position as a market leader and is now branching out to outbound Chinese?s top vacation destinations (see story).
But its success is not without the occasional hiccup. Airbnb has been accused of neglecting its user interface by blocking feedback from dissatisfied guests, raising concerns about the already-controversial company's accountability (see story).
"The Found Money program helps users find even more money to invest by providing rewards from brands consumers know, love and shop with regularly directly into their Acorns account," Mr. Field said. "This transforms the notion of rewards programs, shifting the cash-back paradigm to 'Cash Forward.'
"Since launching in May, Acorns has announced ?Found Money? partnerships with Blue Apron, Hotel Tonight, Jet.com, 1-800-Flowers, and soon Hulu. We are continuing to add new partners regularly to the program," he said. "In terms of teaching users about the kinds of investment they are making, Grow from Acorns works alongside Found Money to help users achieve their financial goals with the right tools, support and advice that can be applied right now.
"Found Money strengthens the relationship between the mobile consumer and brands, allowing brands to invest directly in the financial future of their customers."