Just two months after listing its first fund on the stock market, Robinhood is preparing to launch its second. The company has filed a private registration for RVII, a standard regulatory measure that allows it to go through an approval process before making information public.
Uas its first fund, currently holding 10 late-stage companies – Airwallex, Boom, Databricks, ElevenLabs, Mercor, OpenAI, Oura, Ramp, Revolut, and Stripe – RVII will cast a wide net, invest in early stage growth and startups. It’s a meaningful distinction, given that early-stage startups are smaller and carry more risk but also offer greater profit potential.
RVII’s fundraising goal has not been set, the company said in a blog post. For its first fund, Robinhood sought to raise $1 billion but ended up a few hundred million short of that goal.
Despite the shortage, the first fund was very effective. RVI – the ticker of Robinhood’s first fund, which trades on the NYSE (New York Stock Exchange) – starts on the NYSE at $ 21 a share at the beginning of March and has more than doubled, closing on Monday at $ 43.69. Market enthusiasm for AI’s prospects for fundamental fund startups is likely to fuel the stock’s growth.
The premise of both these funds addresses the gap that exists in who invests in startups. Under federal law, only “accredited” investors – those with net worth of more than $1 million or annual income of more than $200,000 – can invest in private companies. That has historically locked mainstream investors out of the early and capital-intensive stages of a company’s growth. RVI and RVII are now, designed to change that, allowing anyone to invest in a private startup portfolio through a traditional brokerage account.
“You can imagine [Robinhood Ventures] as a publicly traded currency company with daily capital. There are no requirements for approval and no carry,” said Robinhood CEO Vlad Tenev in an interview at the Wall Street Journal’s Future of Everything conference last week. Daily liquidity means shares can be bought or sold any day the market is open, unlike traditional VC funds, where capital is locked up for years.
In the last few years, the most important AI startups have gone from early bets to companies worth tens or hundreds of billions of dollars, and almost all of that appreciation has happened in the private markets, where most investors are inaccessible.
Tenev’s long-term vision continues. “The desire is that, if you are a company raising seeds and a Series A round – so, the first capital – sales should be a large part of that round, as it is now in the public markets,” Tenev said at the conference. “And we have to let those people in on the ground, so they can actually benefit from this potential appreciation that’s happening with the increase in private markets.”
If that idea continues, it could fundamentally change how businesses begin to raise their initial capital, where retail investors end up sitting next to trading companies, including in early rounds, where large returns are often made, large amounts of money are lost, too.
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