Robinhood to acquire fintech startup X1 for $95 million

The online broker Robinhood has agreed to acquire X1, a platform that offers a no-annual-fee cashback credit card. The deal is expected to total around $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 toward serving all of our customers’ financial needs. More info:… pic.twitter.com/VCUjBxkpsM

— Robinhood (@RobinhoodApp) June 22, 2023

The metal X1 credit card carries no annual fees, no late-payment fees, or international transaction fees. The product is accompanied by a mobile app.

“This acquisition will bring us closer to our goal of meeting all of our customers’ critically important financial needs. Together with X1, we will now be able to offer them access to credit,” said Robinhood co-founder and CEO Vlad Tenev.

Co-founders Deepak Rao and Siddharth Batra will join the online broker’s team and oversee the company’s new line of business. Rao will become General Manager for Credit Cards, reporting directly to Tenev.

J.P. Morgan Securities acted as financial adviser to Robinhood. The deal is expected to close in the third quarter of 2023. The online broker will pay for it entirely in cash.

According to X1’s site, as of July 2022 the startup had raised more than $45 million in funding. Monthly sales volume exceeded $50 million, and the platform was expected to reach $1 billion by year-end. The credit card waitlist numbered 500,000 users.

As of the first quarter of 2023, Robinhood reported a decline in revenue from operations by 5%, to $207 million. The cryptocurrency segment fell by 30% to $38 million.

Earlier in May, the company recorded a decline in trading volumes of digital assets by 68%.

From June 27, the online broker will discontinue support for the cryptocurrencies Cardano (ADA), Polygon (MATIC) and Solana (SOL).