Robinhood, opens a new tab, launched its flagship $658.4 million venture fund on the New York Stock Exchange on Friday, providing retail investors a rare chance to invest in high-profile, privately held technology companies.
The largest venture capital firms have long been playing in the arena of private company investments, where retail investors have been left out of the thriving market, where valuations have soared over recent years.
The fund, which initially traded under the ticker ‘RVI’, has investments in significant private companies, such as software startup Databricks, fintech Ramp, and financial services firm Revolut.
Robinhood CFO Shiv Verma told Reuters in an interview, “There is a big gap in the market where the retail customer cannot access private assets.”
Some private companies now command valuations that competitor or exceed the market capitalization of companies in the S&P 500. Databricks surged in capital at a $134 billion valuation in February, while Ramp was valued at $32 billion in November.
The analysts reported that the fund is risky, as it is susceptible to the ups and downs in the valuation of individual companies, but that is not specific to the fund. The broader venture capital exit market has also been turbulent in recent years as IPO activity slowed.
Robinhood shared its IPO at $25 per share and sold 12.6 million shares, which is fewer than its intended amount. IPO investor demand is still uneven as markets persistently fluctuate in the wake of geopolitical unrest and apprehension of AI-induced interference.
Verma said Robinhood purposely chose industry-leading late-stage companies that are “much less risky” than early-stage startups.
He said, “These are great investments, they’re going to do well, and if there’s some short-term volatility in the interim, because it’s a closed-end fund, you’re not forced to sell.”
Verma contributed the fund, which has the potential to expand into other areas such as energy, robotics, aerospace, and defense, and were also in demand by institutional investors during the IP roadshow.
Robinhood was initially a trading app popular among mom-and-pop investors but has since grown into a wider range of financial services, contributing to the growth of its market capitalization to over $72 billion.
