Is HOOD's Private Markets Access to Retail Investors a Growth Driver?

Robinhood Markets HOOD, founded on the mission of democratizing finance, is extending its reach into private markets. It has filed with the Securities and Exchange Commission to launch a publicly traded closed-end fund, Robinhood Ventures Fund I, which will invest in private companies across aerospace, AI, fintech and robotics. Managed by Robinhood Ventures DE, LLC, the fund is set to trade on the NYSE under the ticker RVI, pending approval.

For retail investors, this represents a breakthrough: direct access to startup investing, long reserved for accredited investors. The move comes amid a sharp decline in the number of public companies and the surge in private valuations, which now exceed $10 trillion in the United States.

This initiative follows Robinhood’s June launch of private tokenized stocks in the European Union (EU), extending its vision of making alternative assets accessible. Like its EU offering, RVI aims to give U.S. investors a way to participate in high-growth companies before they go public.

By launching RVI, Robinhood is positioning itself at the crossroads of venture capital and public markets, offering retail investors exposure to cutting-edge sectors while strengthening its moat in alternative investing.

Robinhood’s private-markets push will likely unlock new fee revenue streams, deepen engagement with high-value users and expand its addressable market. Also, the fund will result in recurring assets under management (AUM), boost Average Revenue Per Unit and strengthen its moat alongside launches in social, AI and trading tools, thus compounding growth and monetization.

Steps By Other Firms to Make Private Markets More Accessible

Of late, private markets are turning out to be a lucrative business option for many financial firms. BlackRock BLK is enhancing its private markets capabilities to capitalize on rising demand and attract new clients. Over the past year, BlackRock has invested more than $28 billion to strengthen its position in the high-growth private markets space. Further, BlackRock is targeting $400 billion in private markets fundraising by 2030, with an aim to double its operating income and market capitalization.

Further, Goldman Sachs GS and T. Rowe Price TROW have formed a partnership to expand retirement and wealth solutions across public and private markets. Goldman will invest $1 billion for a 3.5% stake in TROW, gaining access to its retirement-focused clients. The collaboration will roll out private market access, Target-Date Strategies (mid-2026), model portfolios, multi-asset offerings and advisor-managed accounts. Goldman and T. Rowe Price aim to boost AUM, broaden client reach and capture higher fee income in the growing retirement solutions market.

Robinhood’s Price Performance, Valuation & Estimate Analysis

This year, shares of HOOD have skyrocketed 208.2%. In the same time frame, the industry has jumped 26.9%.

Given the impressive price performance, HOOD shares are currently trading at a massive premium to the industry. The company has a 12-month trailing price-to-tangible book (P/TB) of 13.92X compared with the industry average of 2.97X.

The Zacks Consensus Estimate for Robinhood’s 2025 and 2026 earnings implies year-over-year growth of 45.9% and 18.3%, respectively. In the past week, earnings estimates for 2025 and 2026 have been revised upward to $1.59 and $1.88, respectively.

HOOD currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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