Online brokerage firm Robinhood Markets has announced its acquisition of card startup X1 for $95 million in cash. The acquisition is part of Robinhood’s strategy to broaden its product offering and strengthen its relationship with existing customers. San Francisco-based X1 is known for its no-fee credit card, which is made from stainless steel and allows users to accumulate points. Robinhood plans to retain X1 employees as part of the acquisition, including co-founders Deepak Rao and Siddharth Batra.

Robinhood CEO Vlad Tenev expressed excitement about the acquisition, stating that it will enable Robinhood to offer its customers access to credit. The move comes amid a growing trend of companies offering new credit card options, mainly digital alternatives. Over the past decade, several new entrants in the fintech space, such as Marqeta and Tandym, have emerged to cater to this market.

Founded in 2017, X1 has raised $62 million in venture capital and has between 11 and 50 employees. Co-founders Rao and Batra previously worked at Twitter for about four years before starting X1. While the exact number of X1 employees to be retained by Robinhood was not disclosed, the acquisition marks a significant step for Robinhood in diversifying its revenue streams.


Unlike traditional credit card issuers, X1 does not charge annual or late fees. However, it does charge users interest on their balances, ranging from 19.99% to 29.99%, based on their creditworthiness. Additionally, X1 generates revenue by charging merchants an interchange fee for transactions made using its cards.

X1 cardholders can redeem points earned through their credit card purchases at X1’s merchant partners. Some cardholders who use the company’s app may also have the option to save points for cash at a rate of less than 1 cent per point, according to the X1 website.

The acquisition of X1 represents a strategic move for Robinhood to tap into the credit card market and diversify its revenue streams. By offering a no-fee credit card option, Robinhood aims to attract and retain customers while generating revenue from interchange fees charged to merchants. The acquisition also underscores the growing trend of fintech companies expanding into new financial services sectors to meet the evolving needs of consumers.

Also Read

Cryptoverse: What crisis? Venture Capitalists Bet Big on Crypto

Leave a Reply

Your email address will not be published. Required fields are marked *