Robinhood's Startup Fund Falters in NYSE Debut
Robinhood's new fund, designed to give retail investors access to stakes in late-stage startups, has stumbled in its first days of trading on the NYSE. The fund underperformed broader indices, raising questions about investor appetite for public vehicles that hold private-market assets.
The new fund, trading under the ticker RVI, priced its initial public offering at $25.00 per share. On its first day of trading, the fund's shares fell significantly, closing at $21.05, a drop of nearly 16%. The closed-end fund raised approximately $658.4 million, with the potential to reach over $705 million if the underwriter fully exercises its option to purchase additional shares. This was below its initial fundraising target of $1 billion. RVI provides retail investors with exposure to a concentrated portfolio of late-stage, private technology companies. Initial holdings include software and data company Databricks, financial services firm Revolut, and fintech company Ramp. The fund's portfolio also includes stakes in companies like Airwallex, Boom Supersonic, Mercor, and Oura. An agreement is also in place to add payment processing giant Stripe to its holdings post-IPO. Some analysts suggest the lackluster debut reflects broader skepticism about high valuations in the private venture capital market. The absence of highly anticipated IPO candidates like OpenAI and SpaceX in the fund's initial holdings is also seen as a potential reason for weaker retail investor interest. The fund is part of a larger trend of financial firms seeking to "democratize" access to private market investments, an asset class traditionally reserved for institutional investors. Robinhood's CFO, Shiv Verma, stated the focus is on "industry-leading late-stage companies that are much less risky" than early-stage startups.
