Robinhood is set to acquire San Francisco-based credit card service provider, X1. The financial firm made the development known today via a blog post. According to the announcement, Robinhood regarded the acquisition as a crucial step in its effort to widen the scope of its services. Also, the financial service provider established that the acquisition of X1 will help strengthen its relationship with existing customers.
Meanwhile, the organization is expected to complete the deal by the third quarter of 2023. With the deal, Robinhood will seek to provide more access to credit for its users. Also, the company intends to leverage X1 services to serve its customers’ financial needs. In the announcement, the firm described X1 as a platform that provides a no-fee credit card with rewards on each purchase.
The financial giant went on to state that providing users with access to a no-fee credit card reflects its pursuit to democratize finance for all. Furthermore, Robinhood disclosed that X1 stainless steel credit card has no annual, late, or foreign transaction fees. The firm added that the innovative design of the card suits the DNA of Robinhood.
Additionally, the acquisition is expected to provide a final merger worth of $95 million in cash. As stated in the announcement, the final worth of the merger is subject to customary closing adjustments and conditions. Robinhood disclosed that the deal came into play due to the exclusive financial advise of J.P. Morgan Securities, LLC.
Reactions to the Acquisition of X1 by Robinhood
However, top executives from the two firms have reacted to the acquisition. The CEO and co-founder of Robinhood, Vlad Tenev, reflected on the acquisition. According to the CEO, the deal will push Robinhood towards its goal of attending to the important financial needs of users. Likewise, Vlad Tenev opined that bringing X1 aboard will offer users a pathway to more credit facilities.
More so, the CEO revealed that part of the deal will bring the X1 team aboard. Vlad Tenev added that the co-founder of Deepak Rao and Siddharth Batra will oversee the new business on behalf of Robinhood. With that, Deepak Rao will report to the CEO of Robinhood as the GM of credit cards.
Similarly, the CEO and co-founder of X1, Deepak Rao illuminated how the firm and Robinhood share the same vision. Deepak Rao stated that the two firms will work to make financial markets more accessible to all. Lastly, the CEO submitted that the merger will provide users with enhanced credit card experience.