Robinhood Markets confirmed on Tuesday its first acquisition plans since the release of its initial public offering (IPO) earlier this month of obtaining venture-backed startup Say Technology for around $140 million in cash.
The trading service company revealed the deal in a blog post from the company’s chief product officer, Aparna Chennapragada, without disclosing when the deal is set to be finalized by both parties.
Say Technologies is a platform that motivates shareholders to access complete ownership rights. The platform reveals proxy processing that functions as a medium between shareholders and the site, funds reports, trades confirmations, posts-sale prospectus delivery, and provides class action processing.
“We founded Say to give investors a better way to engage with companies they own, and to give companies tools to better understand and access their investors,” said Alex Lebow co-founder, and CEO of Say Technology in a blog post.
“As part of Robinhood family, we’ll be able to further our goal of creating a new ecosystem of ownership and engagement to benefit all investors and companies,” he added while tackling the acquisition.
According to data from Crunchbase, Say Technology raised around $8 million in funding over three rounds, with its latest funding increasing on September 2018 from an undisclosed round.
In the same blog post, Robinhood portrayed interest in acquiring the venture-backed startup after PitchBook data revealed that the company was worth around $28 million, implicating that the New York firm’s backers attained almost five times returns on their investments.
Say Technologies liberalized the voice of investors in companies they choose to back, as it is one of the contemporary faces of investor communications.
“Like Robinhood, Say was built on the belief that everyone should have the same access to the financial markets as Wall Street Insiders. We share a common goal of eliminating the barriers that keep people from participating in our financial systems,” Chennapragada said in a statement.
Due to Robinhood’s business strategy of granting its users the option of investing in the company, this may push it to attain heavier acquisitions or investments in other compatible companies, products, and even technologies.
According to a regulatory filing, the trading firm purchased media company MarketSnacks in 2019, and recruiting firm Binc in March 2021.
As news of the acquisition broke, Robinhood’s stock fell about 1 percent to $56.20 in morning trading.
Earlier this month, Robinhood initiated trading for its IPO at $38 per share, which was shadowed by a 10 percent drop leading to a close of $34.90 per share. However, the stock bounced back for a boost of nearly 51 percent from its offer price.
The investing platform publicly filed for its IPO in early August by revealing the company’s last year’s profits of a refined income of $7.45 million on net revenue of $959 million.