Riding an AI rally, Robinhood preps second retail venture IPO

Just two months after listing its first venture capital fund on the stock market, Robinhood is preparing to launch a second. The company has has filed a confidential registration for RVII, a standard regulatory step that allows the company to go through the approval process before making details public.

YOUjust like his first fund, in which there are currently interests 10 companies in an advanced stage — Airwallex, Boom, Databricks, ElevenLabs, Mercor, OpenAI, Oura, Ramp, Revolut and Stripe — RVII will cast a wider net and invest in growth-stage and early-stage startups. It’s a meaningful distinction, as early-stage startups are younger and carry more risk, but also offer the potential for higher returns.

The fundraising target for RVII has not yet been set, the company said in a statement blog post. For its first fund, Robinhood tried to raise $1 billion but ultimately fell hundreds of millions short of that goal.

Despite the deficit, the first fund performed strongly. RVI – the ticker for Robinhood’s first fund, which trades on the NYSE (New York Stock Exchange) – debuted on the NYSE in early March at $21 per share and has since more than doubled, closing Monday at $43.69. The market’s enthusiasm for the AI ​​prospects of the fund’s underlying startups likely fueled the stock’s rise.

The premise behind both funds addresses a long-standing divide in who is allowed to invest in startups. Under federal rules, only “accredited” investors — those with a net worth of more than $1 million or an annual income of more than $200,000 — can put money into private companies. That has historically excluded ordinary investors from the earliest and most lucrative stages of a company’s growth. RVI and now RVII are designed to change that, by letting anyone invest in a portfolio of private startups through a regular investment account.

“You can imagine [Robinhood Ventures] as a publicly traded venture capital firm with daily liquidity. No accreditation requirements and no carry,” Robinhood CEO Vlad Tenev said in an interview interview at The Wall Street Journal’s Future of Everything conference last week. Daily liquidity means that shares can be bought or sold every day when the market is open, unlike traditional venture capital funds, where capital is tied up for years. No carry means that Robinhood does not take a percentage of investment profits, as conventional venture capital firms typically do.

In recent years, the most valuable AI startups have gone from early bets to companies worth tens or hundreds of billions of dollars, and almost all of that appreciation has taken place in the private markets, out of reach of most investors.

Tenev’s longer-term vision goes even further. “The aim is that if you are a company that raises both a seed round and a Series A round – so just the initial capital – retail should be a big part of that round, just like it is now in the public markets,” Tenev said at the conference. “And we need to let those people in on the ground floor so that they can actually benefit from this potential appreciation that is increasingly happening in the private markets.”

If that vision becomes a reality, it could fundamentally change how startups raise their initial capital, with private investors ultimately sitting alongside VC firms, including in the early rounds, where the biggest returns are often achieved and a lot of money is lost.