Popular savings and investment app Tassels acquired Pillar, an AI-powered startup designed to help manage student loan debt, as part of its second acquisition in 2021.

New York-based Pillar helps consumers optimize their debt repayments by focusing on student loans first. It was launched in May 2019 with $ 5.5 million in seed funding led by Kleiner Perkins. The companies declined to disclose the financial terms of the deal, noting only that within six months of its launch, Pillar managed more than $ 500 million in student loans from more than 15,000 borrowers.

Michael Bloch dropped out of Stanford Business School and co-founded Pillar after he and his wife racked up over $ 500,000 in student loan debt after graduating from law school. Previously, he had led the New York and California regions for DoorDash, bringing them to $ 100 million in revenue. The problem that Pillar aims to solve is huge. Student loan debt is the second type of consumer debt in the United States, 45 million borrowers collectively owe nearly $ 1.7 trillion in student loans.

Notably, Acorns was apparently one of the many companies that had courted Pillar.

“We were in a fortunate enough position to have a lot of interest from many of the top fintech companies,” Bloch told TechCrunch. “We had several offers on the table and Acorns was really our top pick given the way the business was doing and the team, culture and mission.”

The deal marks the second acquisition this year and the third overall for Acorns, which claims to have recorded their best quarter ever in the first three months of this year. In March, Acorns also acquired Harvest, a fintech that has helped clients reduce their debt by more than $ 4 million in 2020.

The Pillar and Harvest teams will help Acorns accelerate its product roadmap by helping customers pay off debt, “a critical part of the financial wellness system,” said CEO and Founder Noah Kerner.

Over time, Pillar will become part of one of Acorns’ monthly subscription tiers.

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“The intellectual property and technology that the Pillar team created in debt management really interests us when we think about how we are tailoring our smart deposit functionality,” Kerner said.

With Smart Deposit, when a customer’s paycheck reaches the Acorns bank account, the app automatically allocates a percentage of that paycheck to an individual’s various investment accounts.

“From a behavioral standpoint, the best way to get someone to save and invest is to allow them to set aside part of their paycheck as soon as it hits the account so they don’t spend it. This feature has been adopted very well by our direct deposit customers, ”said Kerner. “And so Michael and his team are coming to help manage this feature, as well as our bank accounts product. I think their past experience will be very helpful for us to leverage what we have and help the team catalyze it further.

With its latest acquisition, Acorns, based in Irvine, Calif., Now has more than 350 employees. In 2017, the company acquired Vault, now called “Acorns Later”. As a result of this acquisition, the company saw its number of retirement accounts increase from 500 to 1.2 million.

As mentioned above, Acorns has had a good year so far. In the first six weeks of 2021, the company added nearly 600,000 new accounts, reaching a total of over 9 million users who have saved and invested a total of $ 7.5 billion.

“The first quarter was our biggest quarter of growth on record,” Kerner told TechCrunch. “In particular, we have crossed the $ 4.3 billion in assets under management, which is a really exciting step when you think about the fact that these are clients saving small amounts of money in the relative pattern of money generally invested. “