Robinhood is taking significant steps toward expanding its reach into private markets with the launch of a new venture capital fund aimed at democratizing investment opportunities for everyday investors. The company has submitted an initial registration statement to the Securities and Exchange Commission (SEC) to establish the Robinhood Ventures Fund I (RVI), a closed-end investment vehicle focused on acquiring stakes in leading private companies before they go public.
This initiative will be managed by a newly formed subsidiary, Robinhood Ventures, and intends to make RVI shares tradable on the New York Stock Exchange, pending regulatory approval. The move comes as part of Robinhood’s broader strategy to provide retail investors with access to investment opportunities previously reserved for wealthier individuals and institutional players.
Earlier in the year, Robinhood faced scrutiny for its introduction of private equity tokens for users in the European Union, enabling access to tokenized shares in prominent firms like OpenAI and SpaceX. This offering raised questions regarding the nature of these investments, as OpenAI publicly clarified that the tokens did not convey actual equity ownership in the firm. Despite these challenges, Robinhood continues to push for greater access to private equity for retail investors, believing that traditional barriers to such investments are inequitable.
Vlad Tenev, Chairman and CEO of Robinhood, emphasized the pressing need for this change, stating, “For decades, wealthy people and institutions have invested in private companies while retail investors have been unfairly locked out.” The company has pointed out that the number of public companies in the U.S. has plummeted nearly 50% since 2000, whereas the private market has surged to an estimated value of over $10 trillion, according to data from the Federal Reserve.
If the SEC approves the RVI fund, it will invest in a select group of private companies across a variety of industries, holding those investments through their initial public offerings (IPOs) and beyond. Shares of the fund would be available for trading through conventional brokerage platforms, allowing a wider audience to participate in these lucrative investments.
Amid these developments, Robinhood’s stock has seen a slight decline, dropping 1.4% to $113.39 in the most recent trading session, indicating the market’s cautious response to the company’s ambitious plans for expansion in the venture capital space.
