A zero-fee, stainless steel credit card with rewards on every purchase, and an intuitive mobile app experience will enhance Robinhood’s product offering and deepen its relationship with existing customers.
Robinhood Markets has entered into an agreement to acquire San Francisco-based fintech X1, which has developed a credit card platform offering rewards for purchases without any annual fees, late fees, or foreign transaction fees.
The company aims to “democratize finance for all” with this expansion of its product portfolio. “This acquisition will bring us closer towards our goal of serving the entirety of our customers’ critical financial needs. Together with X1, Robinhood will now be able to offer our customers access to credit,” says Vlad Tenev, CEO and co-founder of Robinhood.
The X1 employees will join the Robinhood team. X1’s co-founders Deepak Rao and Siddharth Batra will remain to oversee this new business for the parent company. Rao will serve as GM of Credit Cards reporting to Tenev on the new subdivision.
The final value of the merger is expected to be approximately $95 million in cash. The deal is to finalize sometime in Q3 2023.
X1, the challenger credit card startup, was founded by former Twitter executives. The innovation of its flagship credit product is that X1 Card uses current and future income data instead of credit scores to set smart credit limits.
The startup’s proprietary technology lets cardholders cancel subscription payments in one click, end free trials automatically, get instant notifications on refunds, spend anonymously without disclosing personal information, attach receipts to purchases, and create virtual cards for one-time use. Besides, X1 Card comes with a generous loyalty program.
Earlier this year, Robinhood expanded its product and services portfolio with a multi-chain, self-custody, Web3-oriented Robinhood Wallet. The wallet supports both the Polygon and Ethereum networks, enabling customers to buy, sell and hold 50+ ERC tokens, including newly-added assets USDC, UNI, MATIC and SHIB. The Wallet also lets users connect to a wide range of decentralized applications (dApps).