Robinhood has launched its second venture capital fund, opening up investment opportunities in Y Combinator startups to retail investors.

August 15th. U.S. broker Robinhood further expanded its presence in the private placement market by launching the second venture capital fund, Robinhood Ventures Fund II (RVII), allowing retail investors to participate in funding pre-IPO startups.

RVII was listed on the New York Stock Exchange on August 14th with an offering price of $25 per share, raising approximately $2.255 billion. On the first day of listing, the fund attracted over 133,000 Robinhood users to invest, and the intraday stock price rose to around $23.83 on Friday.

The fund primarily invests in early-stage private companies with high growth potential, focusing on companies under the Y Combinator startup accelerator. Y Combinator has previously invested in well-known companies such as OpenAI, Stripe, and DoorDash.

Currently, the RVII portfolio includes around 80 private companies, with 64% of the investments in the technology sector. The fund's holdings cover several AI-related companies, including AI email automation company Shortwave Communications, AI health assistant SharedGenes, multilingual AI voice agent Samora AI, and AI infrastructure company Speedtrain.

Robinhood CEO Vlad Tenev had previously stated that the company aims to lower the barrier for retail investors to access the private placement market. As more companies opt for delayed IPOs, some wealth creation opportunities are shifting from the public market to the private market.

Head of Robinhood Ventures, Sarah Pinto, mentioned that the next generation of outstanding startups is emerging, allowing retail investors to participate in the early growth stages without having to wait for a company's IPO.

However, RVII is structured as a Business Development Company (BDC), making it a closed-end fund with lower liquidity compared to traditional ETFs. Additionally, the fund's total annual expense ratio reaches 4.08%, significantly higher than passive ETFs tracking the S&P 500 index.

Robinhood had previously launched the first venture capital fund, Robinhood Ventures Fund I, in March this year. The company stated that it plans to continue introducing more private placement investment products in the future to meet retail investors' demand to access the private market.