Robinhood Plans To Acquire X1 To Give Customers Access To Credit

The Robinhood exchange has announced a plan to acquire X1 Inc. The latter is a fintech company that provides access to credit cards for $95M in cash. This acquisition deal is slated to close during the third quarter.

Robinhood to acquire X1

This acquisition will allow the firms offering financial services to provide their customers with credit cards. The Robinhood exchange has also said that the acquisition will also include the team at X1.

Some of the members of the X1 team include the co-founders of X1, Deepak Rao and Siddharth Batra. The two will be in charge of the new business. The company has also released a statement on these appointments saying that Rao will be the General Manager for Credit Cards.

Rao will report directly to the CEO and co-founder of Robinhood, Vlad Tenev. Tenev further said that the acquisition would bring the company closer to the objective of serving the critical financial needs of its customers. The acquisition will also unlock the ability of Robinhood to give its customers access to credit. ‘

The CEO and co-founder of X1, Deepak Rao, commented on the development saying, “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.”

He further said that X1 joining Robinhood would provide a better credit card experience. Robinhood is planning to expand its product offerings and grow the relationships that it has with its existing customers. The credit cards provided by X1 do not charge any annual fees, late fees, or foreign exchange transaction fees per a statement by the company.

Robinhood’s poor outlook

The acquisition of X1 by Robinhood comes at a time when the brokerage company has recorded a plunging number of monthly active users. The decline has been attributed to a slowdown across the equities market and an increase in interest rates.

The number of monthly active users at the company has declined from 11.5 million to 10.6 million, which was reported in May. This figure has also declined further, with a 28% drop from the 14.6 million that was reported in May 2022.

Robinhood has also been making significant changes in its crypto division. Early this month, the exchange announced that it would delist some of the top cryptocurrencies, such as Cardano, Polygon, and Cardano. The decision came after the US Securities and Exchange Commission (SEC) filed lawsuits against two of the largest cryptocurrency exchanges, Binance and Coinbase.

Robinhood appears to be cautious of the increased scrutiny that the SEC has shown over the cryptocurrency industry. The SEC has classified some of the top cryptocurrencies as securities that need to be registered with the commission. Robinhood had earlier informed Congress of a plan to review the listed crypto assets.

Robinhood has become a popular platform among retail traders. The financial service platform is popular for providing access to commission-free stock trading options and supporting multiple cryptocurrencies.