Robinhood, a financial services provider, paid $95 million to acquire credit card startup X1.
Robinhood Aims to Develop Close Bonds with Clients
According to Robinhood, the action was “an important step” in developing a close bond with its current clients. The transaction is anticipated to be completed by the end of September, according to a statement made by Robinhood on June 22.
A New Revenue Line
In addition to the debit cards that it already provides to its users, Robinhood picks up a new revenue line as a result of this acquisition. According to Crunchbase, fintech is Robinhood’s fifth purchase in the last 4 years.
Announcement incoming 🚨 We’re acquiring @x1creditcard, a platform that offers a no fee, stainless steel credit card with rewards on every purchase, and an intuitive mobile app experience. This is an important step toward serving all of our customers' financial needs. More info:… pic.twitter.com/VCUjBxkpsM
— Robinhood (@RobinhoodApp) June 22, 2023
The monthly financial periodical MarketSnacks was purchased by the company in 2019, and three other acquisitions—the cross-exchange cryptocurrency trading platform Cove Markets, the hiring firm Binc, and the shareholders’ platform Say—were made in 2021.
In April 2022, Robinhood purchased Ziglu, the UK-based crypto asset business before the crypto winter started.
Robinhood Ceases Support for Multiple Altcoins
The company recently announced that it will discontinue support for Cardano, Polygon, and Solana. The delisting came after the United States Securities and Exchange Commission (SEC) labeled all three tokens as unauthorized securities in its lawsuit against crypto exchanges Binance and Coinbase.
The corporation directly connected its delisting to the SEC’s action. Additionally, the company’s cryptocurrency trading division witnessed a 30% year-over-year revenue loss, falling from $54 million in Q1 2022 to $38 million in Q1 2023.
X1 Recently Raised $62M
Furthermore, In a press statement from the year 2022, X1 stated that it had a $50 million monthly revenue and projected an annualized outlay of $1 billion by the end of the year. According to X1, there are 500,000 individuals waiting for credit cards.
The startup has attracted $62 million from VC companies over the last two years, including Craft Ventures, Soma Capital, and FPV, founded by Wesley Chan, a co-founder of Google Analytics and investor in Plaid and Robinhood.