By Manya Saini
Aug 13 (Reuters) – Robinhood’s second venture fund debuted on Thursday, giving retail investors access to early-stage startups that have traditionally been out of reach for all but venture capital firms and wealthy investors.
The fintech company raised $225.5 million in the initial public offering of Robinhood Ventures Fund II, which will invest in early- and growth-stage private companies.
The fund will focus on current and former participants in the Y Combinator startup accelerator program, which has financed over 5,000 companies with a combined valuation of more than $1.3 trillion, including crypto exchange Coinbase, social media platform Reddit and ChatGPT maker OpenAI.
Robinhood shot to prominence in 2021 by democratizing investing for mom-and-pop investors with commission-free trading. Since then, it has expanded into a broader financial services platform, offering products ranging from retirement accounts to a premium credit card.
“Not only is this one of the more interesting things happening in venture at the moment, it’s like the frontier of that industry,” Rich Aberman, RVII portfolio manager, told Reuters in an interview.
“Hopefully it’s to the benefit of everyday Americans and retail investors that have historically been totally on the outside of the Silicon Valley wealth generation.”
RVII listed on the New York Stock Exchange after pricing 8 million shares at $25 apiece. Robinhood listed its first fund in March, which focuses on late-stage startups.
As startups stay private for longer and raise more money before going public, investors are looking for ways to get in before an IPO.
The trend has helped drive more capital into private markets, where startups can now reach multi-billion-dollar valuations without having to tap public investors.
“We’re already working on (funds) three, four, five, and six,” Sarah Pinto, head of Robinhood Ventures and president of RVII, told Reuters.
“We want to make sure that we’re not rushing into this and that we’re building funds where we can uniquely deliver performance.”
(Reporting by Manya Saini in Bengaluru; Editing by Arun Koyyur)
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