Stock trading app Robinhood has agreed to acquire credit card startup X1 for approximately $95 million in cash.
Founded by former Twitter executive and aimed at digital natives, the stainless steel X1 Card utilizes both current and future income to establish smart credit limits, rather than relying on traditional credit scores. The company’s innovative technology allows cardholders to easily cancel subscription payments with a single click, automatically end free trials using auto-expiring virtual credit cards, receive instant notifications on refunds, attach receipts to purchases, and create virtual cards for one-time transactions.
Last July, X1 secured $25 million in funding before opening applications to a waitlist that had already grown to 500,000 users.
The X1 team will be integrated into Robinhood, with co-founders Deepak Rao and Siddharth Batra leading the new business, and Rao taking on the role of General Manager of credit cards.
This acquisition is part of Robinhood’s strategy to expand beyond its original focus on stock trading; the company currently also offers a debit card. “This acquisition will bring us closer to 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,” said Vlad Tenev, CEO of Robinhood.