Robinhood Markets Inc. kicked off formal marketing of its second publicly traded closed-end fund, which will focus on investing in private companies that have participated in startup accelerator Y Combinator’s programs.
Robinhood Ventures Fund II is offering 7.6 million shares in the initial public offering, and affiliates of the online brokerage firm are offering about 400,000 shares in the deal, for $25 each, according to a filing Monday with the US Securities and Exchange Commission.
The new vehicle plans to invest in a diversified portfolio of early-stage and growth-stage private companies, the filing shows. It will focus on current or previous participants in the Y Combinator program which provides seed funding, mentorship and access to a global founder and investor network, according to the filing. About 500 to 700 startups join its program each year.
Companies that Y Combinator has helped include Airbnb Inc., Stripe Inc. and Instacart.
The vehicle may also invest in companies that are not part of the program, the filing shows. The offering is expected to price after the market closes on August 12, according to terms of the deal seen by Bloomberg News.
Robinhood’s first closed-end private companies fund, Robinhood Ventures Fund I, climbed as much as 2.8% on Monday to $25.50. It went public in March at $25 per share in an IPO that raised $315.4 million. RVI holds stakes in large private technology companies including Databricks, Stripe and Canva.
A Robinhood affiliate will act as adviser to the latest vehicle and earn a base management fee of 2% and an annual incentive fee equal to 20% of cumulative realized capital gains from inception.
Robinhood will hold a video presentation about the new fund with executives including Chief Executive Officer Vlad Tenev at noon Monday in New York via the Robinhood app and YouTube.
Goldman Sachs Group Inc., Citigroup Inc., JPMorgan Chase & Co., UBS Group AG and Wells Fargo & Co. are working on the offering. The shares are expected to trade on the New York Stock Exchange under the symbol RVII.
Written by: Anthony Hughes @Bloomberg
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