Robinhood’s venture fund IPO attracted 150,000+ retail investors, CEO says

Robinhood CEO Vlad Tenev is touting the occurrence of the fintech’s new Ventures Fund I, which allows retail investors to put successful backstage tech companies similar Stripe, Oura, Databricks, OpenAI, and others, done a publicly-traded money listed connected the NYSE. “We had thing similar implicit 150,000 retail investors enactment successful the IPO, truthful it’s rather democratized,” noted Tenev, successful an interview astatine The Wall Street Journal’s “Future of Everything” league this week.

The fund, which launched successful March, arrives astatine a clip erstwhile the word “unicorn,” which erstwhile referred to the uncommon billion-dollar startup, has go outdated. When AI exemplary providers similar OpenAI and Anthropic are raising superior astatine valuations of $850+ billion to $900 billion, different connection too “unicorn” is needed.

“We telephone them frontier companies,” said Tenev, explaining however Robinhood differentiates these larger, backstage companies from different startups.

“There are backstage companies that are raising superior astatine valuations successful the precocious hundreds of billions. You’re going to see, perhaps, aggregate backstage companies getting into the trillions [in valuation] earlier the IPO — earlier retail investors tin participate,” helium said.

Robinhood’s archetypal money has vulnerability to galore tech companies that person yet to spell public, including astir precocious OpenAI, which joins Mercor, Ramp, Airwallex, Boom, and others.

Tenev believes the caller money makes consciousness arsenic portion of Robinhood’s broader ngo to democratize entree to markets for retail investors.

Initially, the institution did this done its zero-commission trades, which importantly accrued retail information successful the nationalist markets. Now it sees investing successful large, backstage companies arsenic the adjacent step.

“You tin deliberation of [the caller fund] arsenic a publically traded task superior steadfast with regular liquidity. No accreditation requirements and nary carry,” Tenev said successful the interview. “So conscionable a competitory absorption fee, nary transportation — which, for those of you acquainted with task capital, typically, erstwhile you put successful a money arsenic an LP, you wage a absorption fee, but there’s besides a transportation of typically astir 20%, which means 20% of your profits spell to the money manager.”

Tenev believes that, owed to the size of these companies, retail investors should beryllium capable to get successful earlier than the IPO — particularly fixed however galore companies are choosing to hold to spell public.

“The aspiration is, if you’re a institution raising a effect circular and a Series A circular — so, conscionable archetypal superior — retail should beryllium a large chunk of that round, overmuch similar it present is successful the nationalist markets,” Tenev said. “And we should fto those radical successful astatine the crushed floor, truthful that they tin really payment from this imaginable appreciation that’s progressively happening successful the backstage markets,” helium added.