Robinhood to Acquire Credit Card Firm X1 for $95M

<p>Robinhood is acquiring X1 Inc., a fintech company that
offers credit cards, for $95 million in cash. The acquisition, which is
expected to close in the third quarter, would enable the financial services firm to offer its
customers access to credit.</p><p>Besides that, Robinhood
said it would be bringing the X1 team on board. X1's Co-Founders Deepak Rao and
Siddharth Batra will oversee the new business, the company noted in a statement shared with <a href="https://financemagnates.com/" target="_blank" rel="follow">Finance Magnates</a> today (Thursday). Rao will also serve as the General
Manager for Credit Cards and report to Vlad Tenev, CEO and Co-Founder of
Robinhood.</p><p>Robinhood Looks Beyond
Trading</p><p>"This acquisition
will bring us closer towards our goal of serving the entirety of our customers'
critical financial needs," commented Tenev. "Together with X1,
Robinhood will now be able to offer our customers access to credit."</p><p>The California-based firm said it is seeking to broaden its product offerings and
strengthen its relationships with existing customers. X1's credit cards have no annual fees, late fees, or foreign
transaction fees, according to the statement.</p><p>"When founding X1,
we set out to create a different kind of credit card with an unparalleled
experience for customers, similar to Robinhood's mission to make our financial
markets more accessible to all," Rao said, lauding the deal. "We
share the same ethos and joining together with Robinhood, we'll be able to
offer an enhanced credit card experience."</p><p>Declining User Demand</p><p>Robinhood's acquisition
of X1 comes at a time the broker is witnessing a <a href="https://www.financemagnates.com/forex/robinhood-reports-8-decline-in-users-and-43-drop-in-crypto-trading-volumes-in-may-2023/" target="_blank" rel="follow">declining
number of monthly active users</a> (MAU) due
to a slowdown in the equities market and the hiking
of interest rates. The firm's MAU dropped from 11.5 million to 10.6
million in May. Compared to the same period last year, the figure dropped even further, declining 28% from 14.6 million.</p><p>Moreover, Robinhood announced
early this month that <a href="https://www.financemagnates.com/cryptocurrency/robinhood-delists-tokens-native-to-cardano-solana-and-polygon/" target="_blank" rel="follow">it
was delisting</a> the
commonly traded cryptocurrencies native to Cardano, Solana, and Polygon
blockchains. This was after the digital assets were identified as securities by
the US Securities and Exchange Commission (SEC) in its lawsuits against Coinbase and
Binance.</p><p>Cautious about the SEC's heightened enforcement actions, especially against digital assets platforms, Robinhood earlier <a href="https://www.financemagnates.com/cryptocurrency/robinhood-reviews-crypto-offering-amid-secs-recent-crackdown/" target="_blank" rel="follow">told
Congress</a> it was reviewing its listed digital assets. The financial services platform is known for offering commission-free stock trading services and more than a dozen cryptocurrencies.</p><p>New exchange on TradingView; HKEX in New York; <a href="https://www.financemagnates.com/forex/news-nuggets-22-june-new-exchange-on-tradingview-hkex-in-new-york/" target="_self" rel="follow">read today's news nuggets</a>.</p>

This article was written by Jared Kirui at www.financemagnates.com.