Aspiration scored its biggest year ever during the pandemic, doubling users to more than 5 million and now landing a $2.3 billion deal to go public.
In the latest testament to the explosive growth of both fintechs and sustainable investing, Los Angeles-based digital bank Aspiration Partners has landed a deal to become the first publicly traded fintech firm focused primarily on socially responsible investing.
Aspiration, which pitches itself as a fintech for environmentalists, announced Wednesday morning it has agreed to merge into blank-check company InterPrivate III Financial Partners in a transaction that values the eight-year-old company at $2.3 billion, more than double its last private-market valuation in May 2020.
The company’s one of only a few fintechs fully embracing the booming movement around environmental, social and governance (ESG) investing. Bank of America reports ESG assets swelled to a record $329 billion in July, more than doubling year over year. In addition to its banking products, Aspiration offers its own managed IRAs and taxable accounts investing in 100% fossil fuel-free companies.
“The switch to sustainability will likely be the largest, fastest shift in behavior in human history, and Aspiration has a central role to play in powering that transformation for individuals and businesses alike,” Cofounder and CEO Andrei Cherny, 46, said in a statement Wednesday.
A lawyer and former speechwriter for Vice President Al Gore, Cherny cofounded Aspiration with entrepreneur Joe Sanberg in 2013 and picked up investments from venture capital firms like AGO Partners and Alpha Edison, in addition to celebrities Robert Downey Jr., Leonardo DiCaprio and Orlando Bloom. Two years later, the pair launched the company’s debit card-equipped cash management account, pledging customer deposits would only be invested in 100% fossil-fuel free companies. Since inception, customers have been able to pay what they want—even if it’s nothing—or opt for a premium service charging $7.99 per month that includes interest-bearing savings.
Though Aspiration reportedly struggled to raise capital in 2019, the company—like many other fintechs—has posted massive growth during the pandemic. Its customers have more than doubled to five million over the past year, and the company says revenues are on track to grow seven-fold in 2021 to more than $100 million. It was named to the Forbes Fintech 50 for the first time this year.
As part of the deal announced Wednesday, InterPrivate III and other investors will give Aspiration up to $412 million in cash—nearly double the $255 million it’s previously raised—to use toward growth initiatives. The fintech is planning to launch a credit card this year and has pledged to plant a tree for every transaction customers make. In lieu of traditional points, customers will receive up to 1% cash-back on all purchases during months in which they’re carbon neutral.
Aspiration joins a growing wave of fintech companies diving into the public markets. This summer alone, payments company Marqeta, personal finance company SoFi and online trading platform Robinhood, which raised $2 billion last month in the year’s second-biggest IPO, have all started trading publicly through either SPAC deals or traditional public offerings. According to PitchBook, a record 66 fintech companies have already gone public this year across the globe, beating out the previous record of 46 set in 2018 and matched last year.
Aspiration’s stock is expected to start trading on the New York Stock Exchange under the ticker ASP in the fourth quarter, but the deal is still subject to shareholder approval.