In early March, Robinhood’s latest investment product got off to a less-than-stellar start. After CEO Vlad Tenev
rang the opening bell on New York Stock Exchange to celebrate the launch of a new private markets fund, the offering tumbled 16% in one day.
Since then, the investment vehicle—which aims to give retail investors exposure to late-stage, private companies through bundling together their equity into one fund—has rebounded 30%. But, now the fund, dubbed Robinhood Ventures I, is facing a new test. Analysts have warned that the
debut of massive tech companies like SpaceX, OpenAI, and Anthropic may play short-term havoc with private markets and the prospects for other big-time firms like Stripe. If SpaceX performs poorly, secondary markets for smaller private companies may slump and the perceived IPO window for buzzy tech firms may close, said
PitchBook.
Is Robinhood’s attempt to let retail investors get a piece of private markets too little, too late?
Sarah Pinto, the head of Robinhood Ventures, told me that those worries are short-term at best. A veteran venture capitalist who spent almost eight years investing at Laurene Powell Jobs’ Emerson Collective, she believes that there will be “tons of opportunities” to notch returns in the years to come. (At Emerson Collective, she backed OpenAI, Anthropic, and Coinbase, among others.)
As the models powering the AI economy continue to improve, Pinto predicts that companies will build an ecosystem of applications that take advantage of OpenAI or Anthropic’s tech. “I actually think this wave of innovation will probably be bigger than any of the previous ones, and that we’re actually just at the beginning,” she said.
So far, Pinto has led Robinhood Ventures to take stakes in only a select group of late-stage companies. These include fintechs like Airwallex and Stripe and AI powerhouses like Databricks and Mercor. Robinhood either invests in primary rounds or buys shares on the secondary market with explicit permission from the startups, she said.
That approach may be unremarkable among most venture outfits but it stands apart from the online brokerage’s controversial experiment with stock tokens. Announced in June, the effort promised European investors blockchain-based exposure to companies like OpenAI and SpaceX. After Robinhood
unveiled the product, OpenAI came out with a blistering
post on X: “We did not partner with Robinhood, were not involved in this, and do not endorse it.”
Pinto wasn’t at Robinhood when the online brokerage announced the initiative and isn’t involved with stock tokens now. Rather, she’s focused, like any venture investor, on persuading buzzy companies to let Robinhood join their cap table.
She argues that those who let Robinhood Ventures buy equity can have a broader set of investors profit from their startups’ growth—an attractive proposition for firms who want a more diverse set of stakeholders. And Pinto said Robinhood’s platform spotlights its portfolio through founder interviews and bios, among other methods.
While Robinhood Ventures aims to currently invest in late-stage startups, Pinto didn’t discount the possibility of making bets on younger firms: “We call this Robinhood Ventures I for a reason.”
See you tomorrow,
Ben Weiss
X: @bdanweissEmail: benjamin.weiss@fortune.comSubmit a deal for the Term Sheet newsletter
here.
Joey Abrams curated the deals section of today’s newsletter. Subscribe here.
