Robinhood Markets Inc. is seeking to raise $1 billion in an initial public offering of a closed-end fund that would give US retail investors access to pre-IPO stocks, according to Bloomberg. The brokerage, known for its role in meme stock trading, is positioning the fund as the next investment craze for individual investors.

The fund would allow Robinhood's user base to invest in private companies before they go public, potentially capturing value from high-growth startups that have traditionally been limited to institutional investors. This move represents a significant expansion of Robinhood's business model beyond its commission-free trading platform and cryptocurrency offerings. The company has been diversifying its revenue streams amid regulatory scrutiny and market volatility.

By creating this vehicle, Robinhood aims to capitalize on retail investors' appetite for alternative investments and early-stage opportunities. The success of this offering could reshape how retail investors access private markets and potentially influence other brokerages to develop similar products. The $1 billion target suggests strong confidence in demand from Robinhood's millions of users.