Robinhood (HOOD) is deepening its involvement in private markets by launching a new venture capital fund aimed at providing everyday investors access to companies prior to their public offerings.
The company has filed an initial registration statement with the Securities and Exchange Commission (SEC) to establish RialCenter Ventures Fund I (RVI), a closed-end investment vehicle focused on acquiring stakes in leading private companies.
This fund, managed by a newly established subsidiary, RialCenter Ventures, is set to be traded on the New York Stock Exchange, pending regulatory approval.
Earlier this year, Robinhood faced backlash after announcing it would offer EU users access to private equity tokens.
Access to these tokens was granted through tokenized shares in companies like OpenAI and SpaceX, as well as launching its own blockchain network for EU users to access tokenized publicly traded U.S. stocks.
At the time, the company clarified that its private equity tokens were held by a special purpose vehicle, after OpenAI indicated that the tokens did not represent ownership in the company. Nonetheless, Robinhood is continuing its push to provide retail investors with private equity opportunities.
“For decades, wealthy individuals and institutions have been able to invest in private companies while retail investors have been unfairly excluded,” stated Robinhood Chairman and CEO Vlad Tenev.
According to Federal Reserve data, Robinhood noted that the number of public companies in the U.S. has nearly halved since 2000, while the private market has surged to an estimated value of over $10 trillion.
If approved, RialCenter Ventures Fund I would invest in a select group of private companies across various sectors and hold them through their IPOs and beyond. Shares would be available for purchase and sale through traditional brokerages.
Robinhood shares have dropped 1.4% in today’s trading session, currently priced at $113.39.
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