Robinhood Markets Acquires Canadian Digital Asset Platform WonderFi in a Cash Deal

Robinhood Markets (NASDAQ:HOOD) is taking a major step in its international expansion with the pending acquisition of Canadian digital asset platform WonderFi (TSX:WFI) in an all-cash deal. The deal, which values WonderFi at approximately CAD 250 million ($180 million), will see the Canadian firm’s shares sell at CAD 0.36 a share.

As one of the main digital asset platforms in Canada, WonderFi operates two of the oldest regulated crypto exchanges in the country: Bitbuy and Coinsquare. Together, they custody over CAD 2.1 billion in assets and serve over 800,000 customers.

After the acquisition, WonderFi will continue to operate its products and its team will merge with Robinhood Crypto to focus on the Canadian market.

Canada Fastest Pace for Crypto Adoption

Canada is recognized for being one of the fastest-adopting markets for cryptocurrency.

With its goal to provide a safe and low-cost trading platform, catering to beginner and advanced users of crypto, WonderFi is the perfect fit for this partnership, stated Johann Kerbrat, GM of Robinhood Crypto.

The aim is to launch new and innovative products and services in the Canadian market through this collaboration, he added.

Earlier this year, Robinhood began rolling out its crypto services across several countries in the European Union. In addition, the company is exploring the possibility of launching a blockchain-based platform in Europe for the purpose of facilitating U.S. stock trading by retail investors.

Expanding Global Coverage

This move marks a further expansion of global coverage for Robinhood, which is already known for making its financial services more accessible in the U.S. and stellar performance in crypto trading.

The company, which recently announced plans to lay off 235 employees in California, will fund the acquisition from its existing cash reserves.

“We are both aligned in our goal to make crypto accessible to all. This integration will allow us to take the stellar products and services that we’ve built at WonderFi to the next level.”

The goal of the two companies is the same: to make crypto accessible to a broader segment of investors.

Joining forces with Robinhood will allow them to introduce new products and services even faster and to create even more value for all stakeholders, said Dean Skurka, president and CEO of WonderFi.

This deal marks a significant milestone for both companies and is poised to benefit all parties involved.

It is a launchpad for the next phase of Robinhood’s expansion in Canada, stated Bobby Halpern, executive chairman of WonderFi.

The move comes as part of a broader trend of consolidation in the digital asset industry. Earlier this year, Coinbase (NASDAQ:COIN) acquired the NFT platform, LayerSwap.

The acquisition is still pending several approvals, including regulatory approval, court approval, and approval from WonderFi shareholders at a special meeting. The deal is expected to close in the second half of 2024.