Crypto and inventory buying and selling app Robinhood has taken a brand new step to diversify its enterprise portfolio by buying the bank card startup X1 in a $95 million deal. The fintech agency affords an income-based bank card with rewards, together with free trial and single-use bank cards.
The deal is predicted to be closed by the top of September, Robinhood stated in an announcement on June 22, including that the transfer was “an essential step” to a deep relationship with its present prospects.
Robinhood, which already affords debit playing cards to its prospects, good points a brand new income stream with the acquisition. In a press launch dated July 18, 2022, X1 reported $50 million in month-to-month quantity and was anticipating to succeed in $1 billion in annualized spend at 12 months’s finish.
Announcement incoming We’re buying @x1creditcard, a platform that gives a no payment, chrome steel bank card with rewards on each buy, and an intuitive cell app expertise. This is a crucial step towards serving all of our prospects’ monetary wants. Extra information:… pic.twitter.com/VCUjBxkpsM
— Robinhood (@RobinhoodApp) June 22, 2023
In line with Robinhood’s newest earnings report, its month-to-month energetic customers base fell from 16 million within the first quarter of 2022 to only beneath 12 million over the identical interval this 12 months. The corporate additionally noticed a 30% income decline 12 months on 12 months for its crypto buying and selling enterprise, with $38 million in crypto buying and selling income in Q1 2023, down from $54 million in Q1 2022.
The fintech is Robinhood’s fifth acquisition in 4 years, in accordance to Crunchbase. In 2019, the corporate acquired the every day monetary e-newsletter MarketSnacks, adopted by three offers in 2021 — the cross-exchange crypto buying and selling platform Cove Markets, the hiring agency Binc and the shareholders’ platform Say. Earlier than the crypto winter broke out, Robinhood acquired the United Kingdom-based crypto asset agency Ziglu in April 2022.
X1’s present valuation is unknown, however the firm claimed to have 500,000 folks on its ready checklist for a bank card in 2022. Since 2020, the startup has raised over $60 million from enterprise capital corporations akin to Craft Ventures, Soma Capital and FPV, the enterprise agency of Google Analytics co-founder Wesley Chan, who can be an investor in Robinhood and monetary companies firm Plaid.
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