Robinhood Buys Credit Card Provider X1 for $95 Million

By
Bill McColl
Bill McColl
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Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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Published June 22, 2023
Robinhood

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Key Takeaways

  • Robinhood agreed to buy X1 for $95 million.
  • X1 is a trading platform that offers no-fee credit cards and rewards on purchases.
  • The move could help Robinhood diversify its revenue stream after reporting a decline in users and trading revenue.

Shares of Robinhood Markets (HOOD) were down 5% in early trading on Thursday after the online trading site announced it agreed to buy San Francisco-based X1, a trading platform that offers no-fee credit cards and rewards on every purchase. 

Robinhood indicated it would be paying about $95 million in cash when the deal closes, which is expected in the third quarter. 

Robinhood co-founder and CEO Vlad Tenev said the purchase “brings us closer towards our goal of serving the entirety of our customers’ critical financial needs.”

The company indicated that X1 co-founders Deepak Rao and Siddharth Batra will oversee the new business for X1, with Rao becoming GM of Credit Cards.

The move could help diversify Robinhood’s income stream, after the company saw a decline in the number of subscribers and trading volume. Robinhood reported last week that in May, monthly active users (MAUs) dropped 28% from the year before, and trading revenue fell 9%, with equity trading volume sinking 15% and cryptocurrency volume plunging 68%.

Robinhood shares declined after the announcement, but were still up 14% year-to-date.

HOOD YTD

YCharts
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  1. Robinhood. “Robinhood Signs Agreement to Acquire X1 - Robinhood Newsroom.”

  2. Robinhood. “Robinhood Markets, Inc. Reports May 2023 Operating Data.”

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