Robinhood's Startup Fund Falters in NYSE Debut
Robinhood's anticipated startup fund stumbled in its New York Stock Exchange debut, with shares opening below expectations and trading volume muted. The tepid response suggests growing investor caution toward new tech-focused funds, particularly those dealing in more speculative, early-stage assets.
The fund, officially named Robinhood Ventures Fund I, trades under the ticker RVI on the New York Stock Exchange. It priced its initial public offering at $25.00 per share, raising $658.4 million. On its first day of trading, the fund's shares opened at $22 and closed around $22.25, approximately 11% below the initial offering price. The debut was described as "tepid" amidst broader stock market weakness. Managed by Robinhood Ventures, the company's SEC-registered investment adviser, the fund charges a 2% management fee of net assets. However, this fee is reduced to 1.00% for the first six months after the IPO, and there is no performance fee. The fund aims to provide retail investors with access to "industry-leading late-stage companies," which are considered less risky than early-stage startups, according to Robinhood's CFO Shiv Verma. This initiative is part of Robinhood's broader strategy to evolve into a comprehensive financial services platform. Initial holdings in the publicly traded vehicle include stakes in high-profile private companies such as software and data intelligence firm Databricks, fintech company Ramp, and financial services firm Revolut. The largest initial investment is an $18.5 million stake in Databricks. The portfolio also includes investments in Airwallex, Boom Supersonic, Mercor, and Oura. Additionally, the fund has an agreement to purchase shares in payments company Stripe, a deal expected to close shortly after the IPO.
