Robinhood Ventures Fund II has raised $225.5 million and opened at $22.50 on the New York Stock Exchange, 10% below its $25 initial public offering price.
Summary
- RVII raised $225.5 million after offering 8 million shares at $25 each.
- The fund opened at $22.50 on the NYSE, 10% below its IPO price.
- Its portfolio targets early- and growth-stage companies connected to Y Combinator.
- Retail investors can buy RVII shares without investing directly in its private holdings.
Reuters reported that Robinhood’s second publicly traded venture fund debuted on Thursday, giving individual investors access to early-stage companies usually available only to venture firms and wealthy investors.
The listing completed an offering that crypto.news previously covered after Robinhood Ventures Fund II priced 8 million shares at $25 each. The share sale raised $200 million, while Robinhood’s initial capital brought the fund’s total size to $225.5 million before sales charges and offering expenses.
RVII began trading on the NYSE at $22.50, placing its opening price $2.50 below the IPO level. The shares give U.S. investors an exchange-traded route into a managed collection of private businesses, although shareholders do not own those companies directly.
Robinhood venture fund targets younger startups
Robinhood designed RVII to invest in early- and growth-stage private companies, distinguishing it from Robinhood Ventures Fund I. The first fund, which was listed in March under the ticker RVI, mainly holds positions in more established businesses that have not yet gone public.
According to an August filing, RVII was prepared with holdings in about 80 private companies. Its strategy centers on businesses founded by current or former participants in Y Combinator, as well as other companies connected to the startup accelerator’s network.
Y Combinator has funded more than 5,000 companies since 2005, including over 100 businesses that reached valuations of at least $1 billion. Its past participants include U.S.-listed crypto exchange Coinbase, social media company Reddit, and OpenAI, the developer of ChatGPT.
The accelerator does not sponsor or endorse RVII, according to the fund’s regulatory disclosures. Robinhood has permission to use the Y Combinator name when describing the investment strategy, but the accelerator does not accept responsibility for the portfolio or its performance.
Rich Aberman, RVII’s portfolio manager and a former Y Combinator founder and visiting partner, described the fund as part of a new area of venture investing.
“Not only is this one of the more interesting things happening in venture at the moment, it’s like the frontier of that industry,” Aberman told Reuters.
Aberman said the structure could benefit “everyday Americans and retail investors” who have historically remained outside the wealth created by Silicon Valley startups.
Listed shares bring private-market risks
Structured as a business development company, RVII is a closed-end fund whose shares trade on the NYSE. Investors can buy and sell the listed shares through brokerage accounts, but they cannot redeem them directly with the fund before liquidation.
Market demand can therefore push the share price above or below the value of RVII’s underlying assets. Its $22.50 opening showed that such a gap can appear as soon as trading begins, even though IPO investors paid $25 for each share.
Early-stage companies also carry different risks from the later-stage businesses held by RVI. Young companies may lack steady revenue, require repeated funding rounds, or fail before reaching the public market. Private holdings can be difficult to value because they do not trade continuously on an exchange, leaving fund managers to rely on financing rounds, company information, and valuation methods disclosed in regulatory reports.
RVII charges a 2% annual management fee and a 20% incentive fee on realized capital gains. Its prospectus estimated total annual expenses at about 4.18%, though the actual cost can vary. Robinhood Ventures Fund I did not impose the same performance fee.
The fund’s registration documents describe the investment as speculative and warn that shareholders could lose a substantial portion of their money. Unlike direct investors in a startup, RVII shareholders also do not receive voting rights or direct claims against the companies held in the portfolio.
For U.S. retail buyers, RVII trades as a regulated, exchange-listed security rather than as a token representing a private company. The Securities and Exchange Commission declared its registration statement effective before the IPO, while the NYSE listing provides a public market for the fund shares.
Goldman Sachs served as lead bookrunner for the offering. Citigroup, JPMorgan, UBS Investment Bank, and Wells Fargo Securities acted as joint bookrunners, and the underwriting group received a 30-day option to buy another 1.2 million shares at the IPO price, less discounts and commissions.
If exercised in full, the option would add $30 million and increase the fund’s size to as much as $255.5 million before sales charges and expenses.
Robinhood expands retail private-market access
Robinhood’s first venture vehicle raised about $658.4 million when it listed in March. RVI initially fell roughly 16% during its first day of trading before later recovering, showing how the market price of a closed-end fund can move separately from its reported asset value.
The older fund has invested in companies including SpaceX, Stripe, Databricks, Canva, Ramp, Revolut and ElevenLabs. In April, it also bought OpenAI shares worth about $75 million, giving public-market investors indirect exposure to the private artificial intelligence company.
RVI’s holdings include businesses with links to digital assets. Stripe provides stablecoin and tokenization services, while Robinhood has separately expanded its own crypto operations, prediction markets, and tokenized-stock products.
Robinhood gained attention among individual investors through commission-free trading and has since added retirement accounts, advisory services, and a premium credit card. Its venture funds extend the same retail-focused model to private-company investments, where access has often depended on accreditation rules, high minimum commitments, or relationships with venture managers.
Companies have also remained private for longer while raising enough capital to reach multibillion-dollar valuations before an IPO. According to Reuters, investor interest in accessing businesses during that period has directed more money toward private-market products.
Robinhood Ventures is already preparing additional vehicles beyond RVI and RVII. Sarah Pinto, head of Robinhood Ventures and president of RVII, told Reuters that work had begun on funds three through six.
“We want to make sure that we’re not rushing into this and that we’re building funds where we can uniquely deliver performance,” Pinto said.
