Robinhood spend $95M to purchase the fintech company X1.

Robinhood spend $95M to purchase the fintech company X1.

Robinhood, the popular app for crypto and stock trading, is expanding its business by acquiring credit card startup X1 for $95 million. X1 is a fintech company that offers income-based credit cards with attractive rewards, as well as free trial and single-use credit cards.

In a statement released on June 22, Robinhood described the acquisition as an “important step” in deepening its relationship with existing customers. The deal is expected to be finalized by the end of September.

By acquiring X1, Robinhood, which already provides debit card services, will gain a new revenue stream. According to a press release in July 2022, X1 has a monthly volume of $50 million and is projected to reach $1 billion in annualized spend by the end of the year.

 

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However, Robinhood’s latest earnings report shows a decline in monthly active users, dropping from 16 million in Q1 2022 to just under 12 million in the same period this year.

The company’s crypto trading business also saw a 30% year-on-year revenue decrease, reporting $38 million in Q1 2023, down from $54 million in Q1 2022.

This acquisition of X1 is the fifth that Robinhood has made in the past four years, according to Crunchbase. Previous acquisitions include daily financial newsletter MarketSnacks in 2019, cross-exchange crypto trading platform Cove Markets, hiring firm Binc and shareholders’ platform Say All in 2021, and UK-based crypto asset firm Ziglu in April 2022.

While X1’s current valuation remains undisclosed, the company reported having 500,000 people on a waiting list for a credit card in 2022. Since its inception in 2020, the startup has raised over $60 million from venture capital firms such as Craft Ventures, Soma Capital, and FPV.

Compiled by Coinbold