Online broker Robinhood has entered into an agreement to buy the X1 platform, which issues a free cashback credit card. The transaction will cost approximately $95 million.
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 towards serving all of our customers’ financial needs. More info:… pic.twitter.com/VCUjBxkpsM
— Robinhood (@RobinhoodApp) June 22, 2023
The X1 Metal Credit Card has no annual fees, late fees or international transactions. The product is accompanied by a mobile application.
“This acquisition brings us closer to our goal of meeting all of our clients’ critical financial needs. Together with X1, we will now be able to offer them access to credit,” said Vlad Tenev, co-founder and CEO of Robinhood.
Startup co-founders Deepak Rao and Siddharth Batra will join the online broker’s team and oversee a new line of business for the company. Rao will take the position of general manager of credit cards, reporting directly to Tenev.
JP Morgan Securities acted as financial advisor to Robinhood. The deal is expected to close in the third quarter of 2023. The online broker will pay it in full in cash.
As of July 2022, the startup has raised over $45 million in funding, according to the X1 website. Monthly sales reached $50 million, the platform expected to reach $1 billion by the end of the year. There were 500,000 users on the credit card waiting list.
According to the results of the first quarter of 2023, Robinhood reported a decrease in income from operations by 5% to $207 million. The indicator of the cryptocurrency segment collapsed by 30% and amounted to $38 million.
Recall that in May the company recorded a drop in trading volumes of digital assets by 68%.
From June 27, the online broker will stop supporting Cardano (ADA), Polygon (MATIC) and Solana (SOL) cryptocurrencies.
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