Robinhood has seen some decline in monthly active users.
Its crypto trading business revenue has also declined following the recent crypto price decline.
The X1 acquisition will help Robinhood diversify and broaden its product offerings to entice a larger market.
The well-known cryptocurrency and stock trading app Robinhood plans to expand its product line by purchasing credit card startup X1. The $95 million deal will give Robinhood a new source of income and strengthen its ties with current users.
With the help of the income-based credit card from X1 and special options like rewards, a risk-free trial, and one-time use cards, Robinhood hopes to improve the ecosystem of its financial services.
Robinhood success in diversifying its business portfolio
Robinhood has made significant progress in diversifying its business portfolio as part of its ongoing efforts to grow outside of its primary trading platform and the acquisition of credit card fintech X1 is a significant step in this direction.
X1 joins several other firms that Robinhood has acquired, including MarketSnacks, Cove Markets, Binc, Say, and Ziglu. The acquisitions are geared towards helping Robinhood realize its goal of offering a full range of financial services.
By entering the credit card market, Robinhood hopes to increase its revenue and strengthen its ties to its sizable user base. The company understands the value of diversification to maintain long-term growth in light of the decline in monthly active users and revenue decline in its crypto trading business. The company’s strategy of broadening its product offerings and enticing a larger market is consistent with this acquisition.
About Credit Card startup X1
The credit card fintech X1 that Robinhood is buying has drawn a lot of interest from the financial technology community. The startup boasted an impressive waiting list of 500,000 people eager to get its credit card in 2022. This demand highlights the market’s appetite for cutting-edge credit card solutions and points to X1’s potential for expansion.
A wide range of customers can access credit using the income-based credit card that X1 offers by using it in accordance with their income levels. Additionally, X1 sets itself apart with functions like rewards, free trial cards, and single-use credit cards. These special offers give cardholders more flexibility and convenience, which improves their overall financial experience.
X1 received $62 million from well-known VC firms like Craft Ventures, Soma Capital, and FPV in recent funding rounds showing that investors have a lot of faith in the startup’s mission and prospects for success. Furthermore, the involvement of Wesley Chan, an investor in both X1 and Robinhood, emphasizes the similarities and shared commitment to innovation between the two businesses in the financial services industry.