Robinhood's new fund provides access to private tech companies. Here's what to know before investing in it.

By Gordon Gottsegen

The fund allows retail traders to invest in companies like Databricks, Ramp and Stripe

Robinhood seeks to expand client access to investments in private companies.

Brokerage platform Robinhood Markets listed its new private-market fund on the New York Stock Exchange on Friday at $25 per share.

Through the Robinhood Ventures Fund I, which trades under the ticker symbol "RVI," retail traders can invest in a portfolio of private tech companies, including Airwallex, Boom, Databricks, Mercor, Oura, Ramp and Revolut. Robinhood (HOOD) announced that payment-processing company Stripe will be added to the fund shortly after the fund's IPO.

"We do our own independent work to assess whether we think these are companies that can continue to grow, continue to take market share and create new markets," Sarah Pinto, president of Robinhood Ventures Fund I, told MarketWatch. "We picked each and every one of them from our own independent analysis, because we think they are best-in-class."

The launch of Robinhood's ETF follows a trend of fintech platforms trying to provide their customers an ability to invest in private companies. Fintech platform Fundrise is launching a similar private-market fund under the ticker symbol "VCX" on March 10. Fundrise's fund includes investments in Anthropic, OpenAI and Anduril. There's also the ERShares Public-Private Crossover ETF XOVR, which includes investments in a handful of public companies, as well as the private space company SpaceX.

In the past, most retail investors have been excluded from investing in private markets, which typically require high investment minimums, restrict the ability of investors to cash out and have been historically limited to high-net-worth accredited investors.

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Robinhood previously allowed its customers to invest in OpenAI and SpaceX - two of the buzziest private companies - through "tokenized" private equity, but these stock tokens were part of a promotion that didn't see a wider release. Investors in the U.S. were never allowed access.

This time, investors will get access to private companies through a closed-end fund, which is similar to other private-market vehicles like Destiny Tech100 Inc. DXYZ. These closed-end funds are required to disclose a net asset value, which is the collective value of the underlying private investments.

However, because Robinhood's fund is traded on an exchange, supply and demand could cause the fund to trade at a premium or discount to what the fund's board of trustees determines it to be worth. This happened to Destiny Tech100, which saw its share price balloon soon after it was listed even though the NAV stayed the same. At the time, analysts called it a "speculative frenzy" and the share price came crashing down not long after.

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"There are examples of closed-end funds that trade at a pretty rich premium. And there are examples of closed-end funds that trade at a discount," Pinto said.

She pointed out that there are mechanisms that allow Robinhood to step in and buy or sell more shares if the price becomes too detached from its NAV. It's important for retail investors to understand NAVs before they invest in closed-end funds. But, with that in mind, the fund gives retail investors access to private companies they likely can't invest in otherwise.

"At Robinhood, we stand for access. We think that our investors are quite smart, and they can decide for themselves how they want to engage in any kind of asset," Pinto said.

-Gordon Gottsegen

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03-06-26 0930ET