Diversifying its business portfolio, Robinhood, the popular crypto and stock trading app, has announced the acquisition of credit card startup X1 in a deal worth $95 million. X1 is a fintech firm known for offering an income-based credit card with attractive rewards, alongside free trial and single-use credit cards.
In a statement released on June 22, Robinhood described the acquisition as an “important step” towards deepening its relationship with existing customers. The deal is set to close by the end of September.Â
Already providing debit card services to its users, Robinhood stands to gain a new revenue stream from the acquisition. As of a press release in July 2022, X1 boasted a $50 million monthly volume and is projected to reach a $1 billion annualized spend by year-end.
However, Robinhood’s latest earnings report showed a decline in its monthly active users, dropping from 16 million in Q1 2022 to just under 12 million during the same period this year.
The company’s crypto trading business also experienced a 30% year-on-year revenue dip, reporting $38 million in Q1 2023, down from $54 million in Q1 2022.
Robinhood’s acquisition spree shows no sign of slowing, with X1 being the fifth in four years according to Crunchbase.
Past 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.
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Although 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.
