Robinhood took a hit Friday as Venture Fund I fell 11% on its first day of trading on the New York Stock Exchange.
The closed-end fund, which trades under RVI, was pitched as a way to gain exposure to private companies that are typically out of reach for retail investors until late.
Robinhood Ventures Fund’s IPO price was $25 per share, which started at $22, fell to $21, then rose a bit to around $22.12, before changing hands at $22.17.
Robinhood gives individual traders access to the retail market through funds that can be traded like stocks
On Friday, Robinhood CEO Vlad Tenev said:
“We are seeing more and more companies even entering the private market at valuations in the hundreds of billions of dollars before retail investors have had a chance to enter at all.”
Vlad added: “We are trying to solve this problem not only by opening the door to the civilian market, but also by completely blowing off the hinges of the door so that it never closes.”
That pitch is at the heart of the product. Although the structure is that of an investment company, individual investors can buy and sell shares in the fund just as they would trade shares in a regular publicly traded company.
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That’s the bigger bet here. Private companies have reached huge valuations while remaining outside of public exchanges, and Robinhood wants to make it easier for non-wealthy investors to enter that part of the market.
Robinhood expands into premium cards and family investing
At the same time, Robinhood isn’t betting on one lane. The company, which started as a stock trading app, said it now has more than 700,000 Gold Card users and spends more than $10 billion annually on its products.
The company is now targeting high-income credit card groups with its invitation-only Platinum card, a market long dominated by American Express and JPMorgan Chase. The new card promises up to five times the spending limit of the Gold Card.
Prices are high. The Platinum Card has an annual fee of $695, but Robinhood says the package is worth more than $3,000 each year. The benefits listed include 5% cashback on meals, various health and wellness benefits, 10% cashback on hotels and car rentals, and an additional 5% cashback on flights booked through the app.
“We built the Gold Card to be the perfect card for everyday spending, but customer demand showed there is room to push the envelope even further,” said Deepak Rao, general manager and vice president of Robinhood Money.
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He added, “The Platinum Card offers higher limits, elite benefits and luxurious benefits, raising the bar for what customers expect from a premium credit card.”
The company also offers custodial accounts for families. This feature allows parents or guardians to invest on behalf of minors, with assets legally vested in the child and transferred automatically once the child reaches the age of majority.
“As we prepare for large wealth transfers, we are reimagining what wealth creation looks like for the next generation of families,” said Abhishek Fatepuria, vice president of product at Robinhood.