Robinhood buys credit card fintech X1 for $95M

cointelegraph.com:

Crypto and stock trading app Robinhood has taken a new step to diversify its business portfolio by acquiring the credit card startup X1 in a $95 million deal. The fintech firm offers an income-based credit card with rewards, along with free trial and single-use credit cards. 

The deal is expected to be closed by the end of September, Robinhood said in a statement on June 22, adding that the move was “an important step” to a deep relationship with its existing customers.

Robinhood, which already offers debit cards to its customers, gains a new revenue stream with the acquisition. In a press release dated July 18, 2022, X1 reported $50 million in monthly volume and was expecting to reach $1 billion in annualized spend at year’s end.

Announcement incoming We’re acquiring @x1creditcard, a platform that offers a no fee, stainless steel credit card with rewards on every purchase, and an intuitive mobile app experience. This is an important step toward serving all of our customers' financial needs. More info:… pic.twitter.com/VCUjBxkpsM

According to Robinhood’s latest earnings report, its monthly active users base fell from 16 million in the first quarter of 2022 to just under 12 million over the same period this year. The company also saw a 30% revenue decline year on year for its crypto trading business, with $38 million in crypto trading revenue in Q1 2023, down from $54 million in Q1 2022. 

The fintech is Robinhood’s fifth acquisition in four years, according to Crunchbase. In 2019, the company acquired the daily financial newsletter MarketSnacks, followed by three deals in 2021 — the cross-exchange crypto trading platform Cove Markets, the hiring firm Binc and the shareholders’ platform Say. Before the crypto winter broke out,