In brief
- Robinhood has agreed to purchase WonderFi for $179 million.
- The acquisition marks Robinhood’s entry into the Canadian market.
- Robinhood and WonderFi shares popped after the announcement.
Robinhood plans to enter the Canadian crypto market by acquiring WonderFi, a Vancouver-based firm backed by Shark Tank personality Kevin O’Leary, the retail brokerage said in a Tuesday press release.
Menlo Park, California-based Robinhood agreed to purchase WonderFi, which operates crypto exchanges Bitbuy and Coinsquare, for $179 million in an all-cash deal, the company said.
Robinhood’s expansion efforts have until now focused primarily on Europe—last year, Robinhood debuted crypto trading across the EU.
“This moment marks a major milestone in our company’s history,” WonderFi President and CEO Dean Skurka told Decrypt. “The build continues and together we’ll super-charge our product offerings for Canadian customers.”
Per Robinhood’s latest earnings results, the company held $27.4 billion worth of cryptocurrencies on behalf of users in the first quarter of this year. On Wednesday, Robinhood said that WonderFi has $2.1 billion in assets under custody.
Robinhood’s acquisition of WonderFi represents a “critical first step in entering the Canadian market,” Dan Dolev, a senior equity analyst at Mizuho, wrote in a research note. If the company is able to establish a foothold in the region, beyond crypto, Dolev believes the region could generate $250 million in annual revenue for the stock trading platform long-term.
Robinhood’s stock price rose 6.4% on Wednesday, with shares changing hands around $61, according to Yahoo Finance. After falling as low as $34 in early April, amid U.S. President Donald Trump’s trade war, Robinhood shares have rallied 64% year-to-date.
WonderFi’s shares, which trade on the Toronto Stock Exchange, popped 34% to $0.24 following Wednesday’s announcement, according to Yahoo Finance. The company, established in 2021, has a market capitalization of $167 million.
O’Leary told Decrypt last year that WonderFi aligns with his love for “picks and shovels,” or investments that are somewhat resistant to changes in market conditions. He also noted that stablecoin issuer Circle is “agnostic to the price of Bitcoin.”
A spokesperson for O’Leary did not immediately respond to a request for comment from Decrypt.
Robinhood disclosed a stronger-than-expected first-quarter performance, marked by a $336 million in profit on $927 million in revenue. The company’s crypto arm showed substantial growth, generating $253 million transaction-based compared to $126 million a year ago.
Beyond WonderFi, Robinhood is expanding its crypto arm internationally through other acquisitions. The company expects its $200 million acquisition of Bitstamp, a Luxembourg-based crypto exchange, to close in the first half of this year as well.
Edited by James Rubin
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
