Robinhood Acquires Credit Card Startup X1: Details
- Robinhood has announced the acquisition of a credit card fintech startup based in San Francisco.
- X1 offers a no-fee credit card with rewards on each purchase, which is in line with Robinhood’s goal.
- The acquisition is expected to close by Q3 2023 at a price tag of $95 million.
- X1 will merge with the acquirer, and co-founder Deepak Rao will serve as the new GM.
The future of cryptocurrencies and blockchain technology in the United States remains uncertain amid the crackdown on the usage of digital assets in the region by regulators. It is crucial to note that American stock and crypto trading firm Robinhood has confirmed the acquisition of credit card startup X1 in an attempt to boost its range of services.
As per the official acknowledgement on June 22, Robinhood confirmed that it had acquired X1 for a total of $95 million and noted that this was an “important move” for the firm as it aims to deepen the bonds that it has made with its existing customers.
Notably, the agreement to acquire the San Francisco-based startup X1, which offers a no-fee credit card with rewards on each purchase, has been signed by Robinhood. The company claims that providing access to a no-fee credit card aligns with its mission to “democratize finance for all.”
“This acquisition will bring us closer towards our goal of serving the entirety of our customers’ critical financial needs. With X1, Robinhood will now be able to offer our customers access to credit,” said Vlad Tenev, CEO and co-founder of Robinhood.
The team of X1 will be onboarded to Robinhood as per the announcement, and the co-founders of the startup, Deepak Rao and Siddharth Batra, will be responsible for overseeing this new business for the crypto and stock trading platform, with Rao serving as GM of Credit Cards. Rao will report directly to Tenev.
The merger is expected to be finalized at $95 million, subject to customary closing adjustments and conditions. The acquisition is expected to close by Q3 2023, with JP Morgan Chase serving as the exclusive financial advisor to Robinhood.
“We share the same ethos and by joining together with Robinhood, we’ll be able to offer an enhanced credit card experience,” said Rao.
As reported earlier by BitcoinWisdom, Robinhood laid off a significant number of its employees over the course of 2022, and in August, it let go of close to 23% of its workforce. It was reported that as many as 780 people might have been affected by the company’s decision. The stock and crypto trading platform also delisted a number of cryptocurrencies a few days earlier.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
