Capitalizing on the rise of artificial intelligence, Robinhood is preparing its second IPO for its retail venture

Just two months after listing its first mutual fund on the stock market, Robinhood is preparing to launch a second fund. The company has It filed a confidential registration for RVII, a standard regulatory step that allows it to work through the approval process before making details public.

ShUnlike his first fund, which currently holds stakes in 10 late-stage companies – Airwallex, Boom, Databricks, ElevenLabs, Mercor, OpenAI, Ora, Ramp, Revolut, and Stripe – RVII will cast a wider net, by investing in growth-stage and early-stage startups. It’s a useful distinction, since early-stage startups are younger and carry more risk but also offer the potential for greater returns.

The fundraising goal for RVII has not yet been determined, the company said in a blog post. For its inaugural fund, Robinhood sought to raise $1 billion, but ultimately fell short of that goal by several hundred million.

Despite the shortfall, the first fund performed strongly. RVI — the index of Robinhood’s first fund, which trades on the New York Stock Exchange (NYSE) — debuted on the NYSE at $21 a share in early March and has since more than doubled, closing Monday at $43.69. Market enthusiasm for the AI ​​prospects of the fund’s core startups likely drove the stock price higher.

The premise behind both funds addresses a long-standing gap in who can invest in startups. Under federal rules, only “accredited” investors — those with a net worth exceeding $1 million or an annual income of more than $200,000 — can put money into private companies. This has historically kept ordinary investors away from the early, most profitable stages of a company’s growth. RVI and now RVII are designed to change that, allowing anyone to invest in a range of private startups through a regular brokerage account.

“You can think about [Robinhood Ventures] As a publicly traded venture capital company with daily liquidity. “There are no certification requirements and no load,” Robinhood CEO Vlad Tenev said in an interview at The Wall Street Journal’s Future of Everything conference last week. Daily liquidity means stocks can be bought or sold on any day the market is open, unlike traditional venture capital funds, where capital is locked up for years. No-carry means that Robinhood doesn’t take a percentage of investment profits, as traditional venture firms typically do.

Over the past few years, the most valuable AI startups have gone from early bets to companies worth tens or hundreds of billions of dollars, and almost all of that rise has occurred in private markets, out of the reach of most investors.

Tenev’s long-term vision goes even further. “The ambition is, if you’re a company raising a seed round and a Series A round — so, just seed capital — retail should be a big part of that round, just like it is now in the public markets,” Tenev said at the conference. “And we have to let those people get in on the ground floor, so they can actually take advantage of this potential upside that is increasingly happening in private markets.”

If this vision takes hold, it could fundamentally change how startups raise their early capital, with retail investors ultimately sitting alongside venture firms, including in early rounds, where the biggest returns are often made, and a lot of money is lost as well.