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RVII may diversify HOOD beyond trading volumes via more custody assets and fees, despite liquidity risks.
Robinhood Markets (HOOD - Free Report) is moving deeper into private-market investing with plans to launch Robinhood Ventures Fund II, or RVII. The fund has confidentially submitted a draft registration statement on Form N-2 with the SEC, beginning the process for a public offering of shares. The size of the fund and the number of shares to be offered have not yet been determined.
RVII is designed to invest in a diversified portfolio of early-stage and growth-stage private companies, giving retail investors access to opportunities that have historically been limited to accredited investors and venture-capital firms. Unlike Robinhood’s first venture fund, Robinhood Ventures Fund I (RVI), which holds stakes in 10 late-stage companies, including OpenAI, Databricks, Stripe, Revolut, Ramp and Oura, the second fund is expected to cast a wider net by targeting younger startups with higher risk but potentially greater upside.
The strategy supports Robinhood’s broader mission to democratize finance. By allowing investors to gain venture-style exposure through a regular brokerage account, the company is expected to attract users seeking access to pre-IPO growth companies, especially in sectors such as artificial intelligence and fintech.
RVII will help Robinhood diversify beyond transaction-based revenues tied to trading volumes. A broader private-market product lineup may increase assets under custody, deepen customer engagement and improve retention. It could also create new fee-based revenue opportunities while strengthening the company’s position as a full-service investing platform.
Still, the risks remain. Early-stage investing is volatile, many startups fail, and fund shares may be affected by liquidity and valuation concerns. Even so, strong performance from Robinhood’s first venture fund suggests retail appetite remains high, making RVII a potentially important growth lever for HOOD.
How are Robinhood’s Peers Diversifying Their Businesses?
Schwab is diversifying by expanding beyond traditional brokerage into wealth management, advisory services, banking, lending, retirement solutions and asset management. Its focus on fee-based advisory assets, net interest income and broader client financial services helps reduce dependence on trading commissions. Schwab’s diversified model supports steadier revenues, deeper client relationships and improved resilience across market cycles.
Interactive Brokers is diversifying by expanding beyond core brokerage into global market access, high-yield cash balances, securities lending, institutional services, retirement accounts and advisor solutions. Interactive Brokers’ growing interest income, international client base and technology-driven platform reduce reliance on trading commissions while supporting scalable growth across retail, professional and institutional investors.
Over the past six months, Robinhood’s shares have lost 33.5% against the industry’s growth of 1.2%.
Image Source: Zacks Investment Research
HOOD’s shares are currently trading at a premium to the industry. The company has a 12-month trailing price-to-tangible book (P/TB) of 8.14X compared with the industry average of 2.89X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Robinhood’s 2026 earnings suggests a year-over-year decline of 9.3%, while the trend is likely to reverse next year, with earnings expected to jump 31.8%. In the past month, earnings estimates for 2026 and 2027 have been revised lower to $1.86 and $2.45 per share, respectively.
Image Source: Zacks Investment Research
HOOD currently carries a Zacks Rank #5 (Strong Sell).
View the Zacks #1 Rank List
Image: Bigstock
How Robinhood's Second Venture Fund Could Boost HOOD's Growth Story
Key Takeaways
Robinhood Markets (HOOD - Free Report) is moving deeper into private-market investing with plans to launch Robinhood Ventures Fund II, or RVII. The fund has confidentially submitted a draft registration statement on Form N-2 with the SEC, beginning the process for a public offering of shares. The size of the fund and the number of shares to be offered have not yet been determined.
RVII is designed to invest in a diversified portfolio of early-stage and growth-stage private companies, giving retail investors access to opportunities that have historically been limited to accredited investors and venture-capital firms. Unlike Robinhood’s first venture fund, Robinhood Ventures Fund I (RVI), which holds stakes in 10 late-stage companies, including OpenAI, Databricks, Stripe, Revolut, Ramp and Oura, the second fund is expected to cast a wider net by targeting younger startups with higher risk but potentially greater upside.
The strategy supports Robinhood’s broader mission to democratize finance. By allowing investors to gain venture-style exposure through a regular brokerage account, the company is expected to attract users seeking access to pre-IPO growth companies, especially in sectors such as artificial intelligence and fintech.
RVII will help Robinhood diversify beyond transaction-based revenues tied to trading volumes. A broader private-market product lineup may increase assets under custody, deepen customer engagement and improve retention. It could also create new fee-based revenue opportunities while strengthening the company’s position as a full-service investing platform.
Still, the risks remain. Early-stage investing is volatile, many startups fail, and fund shares may be affected by liquidity and valuation concerns. Even so, strong performance from Robinhood’s first venture fund suggests retail appetite remains high, making RVII a potentially important growth lever for HOOD.
How are Robinhood’s Peers Diversifying Their Businesses?
Two close peers of HOOD are Charles Schwab (SCHW - Free Report) and Interactive Brokers Group (IBKR - Free Report) .
Schwab is diversifying by expanding beyond traditional brokerage into wealth management, advisory services, banking, lending, retirement solutions and asset management. Its focus on fee-based advisory assets, net interest income and broader client financial services helps reduce dependence on trading commissions. Schwab’s diversified model supports steadier revenues, deeper client relationships and improved resilience across market cycles.
Interactive Brokers is diversifying by expanding beyond core brokerage into global market access, high-yield cash balances, securities lending, institutional services, retirement accounts and advisor solutions. Interactive Brokers’ growing interest income, international client base and technology-driven platform reduce reliance on trading commissions while supporting scalable growth across retail, professional and institutional investors.
HOOD’s Price Performance, Valuation & Estimate Analysis
Over the past six months, Robinhood’s shares have lost 33.5% against the industry’s growth of 1.2%.
Image Source: Zacks Investment Research
HOOD’s shares are currently trading at a premium to the industry. The company has a 12-month trailing price-to-tangible book (P/TB) of 8.14X compared with the industry average of 2.89X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Robinhood’s 2026 earnings suggests a year-over-year decline of 9.3%, while the trend is likely to reverse next year, with earnings expected to jump 31.8%. In the past month, earnings estimates for 2026 and 2027 have been revised lower to $1.86 and $2.45 per share, respectively.
Image Source: Zacks Investment Research
HOOD currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.