Robinhood Markets, a well-known financial services company, seems to be in a phase of expansion. Today, the company announced its intention to acquire X1, a startup that specializes in offering fee-free credit cards. The acquisition will be carried out through a cash deal worth $95 million.
In an announcement, the brokerage firm disclosed that Deepak Rao and Siddharth Batra, the co-founders of X1, will assume roles within the company to oversee the operations of the recently acquired business. X1, a San Francisco-based fintech company, specializes in offering innovative credit cards to its customer base.
Notably, it has attracted investments from notable figures such as Max Levchin, the CEO of Affirm and co-founder of Paypal. In addition, the key distinguishing feature of X1 is its credit cards, which come without any annual fees, late fees, or foreign transaction fees. Robinhood CEO Vlad Tenev commented on the latest deal and said,
“Together with X1, Robinhood will now be able to offer our customers access to credit.”
Furthermore, the deal is anticipated to be finalized during the third quarter.
Robinhood in 2023
The company generated significant attention when it entered and embraced the cryptocurrency industry. Additionally, it stirred controversy by eliminating certain crypto assets. It is also worth noting that, last year, Robinhood initially agreed to acquire Ziglu, a crypto firm based in the U.K. but eventually terminated the deal.
Since its public debut, the shares of Robinhood have witnessed a mixed performance. While there has been a 20% increase in value so far this year, the shares are also down by 86% from their peak, which was achieved in August 2021. This decline occurred shortly after the company’s initial public offering, highlighting the volatility and fluctuations experienced by Robinhood’s stock. Additionally, at press time, Robinhood’s stock price was at 9.76 USD.