WonderFi reported a difficult second quarter (Q2) ahead of Robinhood’s planned $250-million CAD acquisition of the Canadian crypto firm, which is expected to close in the second half of this year.
The Toronto-based company posted a net loss of just over $9.1 million CAD for the quarter, versus a nearly $2.5 million loss a year earlier. It also saw total revenue sag from $13.2 million in Q2 of 2024 to $10.8 million this year.
In its earnings analysis, WonderFi largely attributed the losses to a “challenging” cryptocurrency market.
In its earnings analysis, WonderFi largely attributed the losses to a “challenging” cryptocurrency market. Bitcoin and similar digital assets reached new highs in January following the inauguration of United States (US) President Donald Trump, who has pushed for crypto-friendly policies. However, prices fell soon after and only achieved a “comeback” near the end of Q2 that wasn’t reflected in the earnings, the company said
The startup also pinned the difficult quarter on closing costs associated with the Robinhood deal, as well as “continued investment” in Australia and the firm’s WonderFi Labs innovation wing.
BetaKit has asked Robinhood for comment on the potential impact of these earnings on the valuation of the acquisition, but has not received a response as of publication.
Robinhood announced its acquisition of WonderFi in May. The move is intended to accelerate Robinhood’s Canadian expansion, and will see all leadership and employees stay aboard. WonderFi will continue to offer its products, including its Bitbuy and Coinsquare trading platforms.
WonderFi CEO Dean Skurka said in a BetaKit interview that the buyout valued his business at a “significant premium” and the deal “significantly accelerated” his company’s mission. Both WonderFi securityholders and the Supreme Court of British Columbia have approved Robinhood’s purchase through the American company’s Wrangler Holdings subsidiary.
The earnings come as another US crypto giant, Ripple, is acquiring Toronto payments startup Rail for $200 million USD ($275 million CAD). That deal will bring Rail’s virtual accounts and infrastructure automation to Ripple, making it easier to use digital assets without devoted crypto accounts and wallets on centralized exchanges.
Canadian e-commerce heavyweight Shopify also recently partnered with Coinbase and Stripe to support payments in USDC, a stablecoin (a cryptocurrency whose value is pegged to a conventional asset) backed by the US dollar.
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The US has already embraced crypto on several fronts following Trump’s inauguration. The GENIUS Act, signed in July, creates a regulatory framework for stablecoins, requiring that they be tied at a set rate to the US dollar or other “low-risk” assets. The new US Securities and Exchange Commission chair, Paul Atkins, was co-chair for a crypto advocacy group. Trump has also floated plans for a strategic Bitcoin reserve and has launched currencies named after both himself and his wife Melania, despite the obvious potential for conflicts of interest.
The Canadian government has dealer licences and similar clearances for companies like WonderFi, but has not moved as quickly to adopt crypto as its southern neighbor. This has prompted figures like BlackBerry co-founder Jim Balsillie to advocate for a stablecoin framework out of concern that Canada might be left behind.
Feature image courtesy WonderFi.