Robinhood surges nearly 10% on WonderFi deal; Mizuho sees Canada growth potential
The all-cash deal, announced Tuesday, values WonderFi at C$250 million ($178 million) and provides a 41% premium to its last closing price on the Toronto Stock Exchange. Robinhood will pay C$0.36 per share and expects the transaction to close in the second half of 2025, subject to regulatory and shareholder approvals.
While the deal brings crypto platforms Bitbuy and Coinsquare under Robinhood Crypto, analysts are focused on the broader opportunity. According to Mizuho Securities analyst Dan Dolev, the transaction marks 'a critical first step' toward unlocking what he estimates to be a $250 million annual revenue opportunity, equivalent to nearly 10% upside to Robinhood's 2024 revenue.
Dolev forecasts that Robinhood could eventually reach about 3 million funded accounts in Canada. 'Assuming revenue per funded account of $75 per year, this implies ~$250 million of annual revenue from Canadian funded accounts,' he wrote. His model discounts Robinhood's U.S. penetration and average revenue per user to arrive at more conservative Canadian estimates.
The acquisition also provides strategic benefits beyond user growth. Dolev noted that WonderFi brings with it an Investment Dealer license in Canada, expands crypto staking capabilities, adds 61 supported coins, and complements Robinhood's pending acquisition of Bitstamp in its effort to build institutional crypto offerings.
For Robinhood, the deal aligns with its goal of building 'a global financial ecosystem,' SVP Johan Kerbrat said in the press release. 'WonderFi has built a formidable family of brands serving beginner and advanced crypto users alike, making them an ideal partner to accelerate Robinhood's mission in Canada.'
WonderFi will continue to operate its brands post-acquisition, and its existing leadership will join Robinhood Crypto. Toronto will remain Robinhood's Canadian headquarters, with more than 140 employees.
Mogo, which orchestrated a 2023 merger between Coinsquare and WonderFi, endorsed the deal as a value-maximizing exit. 'This is a defining moment for WonderFi,' said Mogo President Greg Feller.
As regulatory filings and shareholder votes move forward, analysts see Robinhood's Canadian strategy as taking shape, starting with crypto and potentially expanding to traditional brokerage services.
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