Fund Soars 1,200% on Anthropic and SpaceX Hype — Caution Advised for Retail Investors
The Rise of the Fundrise Innovation Fund
A fund that offers exposure to high-profile private companies like Anthropic, OpenAI, and SpaceX has become one of the most volatile investments in recent weeks. Just a week after its public debut on the New York Stock Exchange, shares of the Fundrise Innovation Fund have surged over 1,200%. On Wednesday, the stock reached an intraday high of $575 before closing at $380. Due to the extreme volatility, trading has been paused multiple times during the week.
This surge reflects the growing interest among investors in getting a stake in AI companies that are expected to go public in 2026. According to a recent report from The Information, SpaceX could file for an initial public offering (IPO) this week or next, aiming to raise over $75 billion. This potential IPO is fueling excitement among retail investors who want to get in on the action.
The Mission Behind the Fund
The Fundrise Innovation Fund was launched in 2022 with the goal of making it easier for everyday investors to access top private tech companies. Benjamin Miller, the CEO of Fundrise, explained this mission to Jendela Magazine. Before its public launch, the fund had over 100,000 existing investors and more than $650 million in assets under management.
As more companies remain private for longer periods, retail investors are seeking ways to invest in high-growth AI startups. Noel Moldvai, CEO of pre-IPO investment platform Augment, noted that institutional investors have been active in this space for years. However, what’s changing now is the rapid increase in demand from individual investors.
Risks and Volatility
Despite the excitement, investors should be aware that investing in pre-IPO instruments can be highly speculative. These investments often come with increased volatility and limited liquidity. For example, shares of the Fundrise Innovation Fund are currently trading over 20 times their net asset value (NAV) of $18.26. This means investors are paying around $20 for every $1 of actual assets.
The Fundrise Innovation Fund is a closed-end fund, which means it issues a fixed number of shares that can be bought and sold throughout the day on brokerages. The NAV represents the fair value of the underlying assets, calculated by subtracting the fund’s liabilities from its total assets and dividing the remainder by the number of outstanding shares. Typically, closed-end funds trade at a discount to their NAV due to management fees and the illiquidity of the underlying assets.
According to the fund’s prospectus, shares purchased before February 20 are subject to a six-month lockup period, further limiting liquidity for early investors.
A Trend That Has Been Seen Before
This isn’t the first time that closed-end funds offering access to popular private companies have experienced dramatic price swings. In April 2024, shares of the Destiny Tech100 fund, which includes holdings such as SpaceX, OpenAI, and xAI, soared as much as 1,008% upon its listing on the New York Stock Exchange. However, these gains were quickly lost, and the shares have fluctuated wildly since then. The fund rebounded by 600% in late 2024 but then dropped over 50% from that peak.
Some of the recent success of the Fundrise Innovation Fund has also benefited another similar fund, DXYZ. Shares of DXYZ rose 15% on Wednesday, trading at $30.58, which is about 50% higher than its NAV.
Why VCX Might Be Different
Nik Talreja, CEO of the venture-investment platform Sydecar, believes that DXYZ may have underperformed in the past because it traded at too high a premium to its NAV. Additionally, companies like Anthropic and OpenAI didn’t have the same level of household recognition they do today.
“The timing is better for VCX, and it is much more concentrated in Anthropic and OpenAI (20.7% and 9.9%, respectively), which appeals to today’s retail investors,” Talreja said. However, he also cautioned that this doesn’t mean VCX’s current valuation is sustainable.
The Future of Pre-IPO Investing
As more investors look to get in on the next big thing, the trend of pre-IPO investing is likely to continue. With companies like SpaceX and OpenAI poised for major developments, the market for these types of funds is expected to grow. However, investors must weigh the risks carefully before jumping into what could be a highly volatile and unpredictable space.
