On Tuesday, Robinhood announced it is acquiring WonderFi, a Canadian leader in the cryptocurrency space, for CA$250 million (approximately $178.56 million) in an all-cash transaction. This move marks Robinhood’s strategic entry into Canada’s rapidly growing digital asset market.
WonderFi operates two regulated crypto platforms, Bitbuy and Coinsquare, which together hold over CA$2.1 billion in assets under custody. Under the terms of the deal, WonderFi shareholders will receive CA$0.36 per share, reflecting a 41% premium over the company’s most recent closing price. WonderFi went public in Canada in 2021 through a reverse takeover.
Strengthening Robinhood’s Global Expansion Strategy
This acquisition follows Robinhood’s $200 million purchase of European exchange Bitstamp last year, underscoring its push for global growth. By acquiring WonderFi, Robinhood strengthens its presence in Canada and further establishes itself as a leader in the global cryptocurrency exchange market.
As part of the deal, WonderFi’s team, including CEO Dean Skurka, will join Robinhood Crypto, adding to the 140 employees Robinhood already has in Toronto. The acquisition is expected to be finalized in the second half of 2023.
Robinhood CEO Vlad Tenev expressed his enthusiasm for the changing U.S. regulatory landscape, which is becoming more favorable to the cryptocurrency industry. Tenev highlighted Robinhood’s increasing focus on crypto as the company sees it as the next major innovation in financial technology. “I think crypto is the next in line in a long chain of technology innovations that have changed the underlying infrastructure of the financial system in a positive way,” Tenev said.
What The Author Thinks
Robinhood’s decision to expand into Canada with the acquisition of WonderFi makes a lot of sense, especially considering the growing interest in digital assets worldwide. However, while this acquisition positions Robinhood as a stronger player in the Canadian market, it will face fierce competition from other crypto exchanges and fintech platforms. Robinhood will need to continuously innovate and adapt to local market needs if it wants to truly succeed in Canada, a country where cryptocurrency adoption is already well-established.
Featured image credit: FMT
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