Fintech
Billionaire Steve Cohen’s Point72 Ventures Fires Fintech Team to Pivot to AI
Steve Cohen, founder and CEO of Point72 Asset Management and owner of the New York Mets.
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Billionaire by Steve Cohen Venture capital arm Point72 Ventures is moving away from fintech and cryptocurrencies after firing its five investors focused on those areas, Forbes has learned. The company will instead shift more focus to investing in artificial intelligence and defense technology startups, according to two people familiar with the situation.
The departures include three fintech-focused investors and two investors in Point72 Ventures’ digital assets team. Partners Tripp Shriner and Sugam Sarin are also likely to leave, the sources said, though another said there is a possibility they could remain on the team to support existing portfolio companies. Point72 had announced Sarin’s promotion runs through May 1. Shriner and Sarin did not respond to requests for comment.
“We are always evaluating our portfolio performance and market opportunity and optimizing our strategy and resources around what we believe to be the largest opportunity,” a Point72 spokesperson said in a statement to Forbes, declining to comment further.
Point72 Ventures, a multi-stage venture fund funded by Cohen within his $30 billion hedge fund Point72 Asset Management, has distributed about $1 billion since its launch in 2016. It has since invested in more than 100 startups, spanning fintech, AI, consumer, enterprise and defense technology. Of those investments, 65 have been in fintech startups. company website.
Fintech startups have promised to disrupt old-school banks, insurance companies and credit card companies with modern technologies, sleek designs and new financial products like access to earned wages or early direct deposits. In 2021, the category reached a funding high, raising more than $140 billion in 5,474 funding rounds, according to CB Information. However, since then fintech startup ratings have decreased dramatically; venture funding in the sector is down 70%.
In comparison, funding for AI startups has outpaced that for non-AI startups in recent months, with 6 billion dollars and $1 billion funding round for Elon Musk’s xAI and unicorn for data labeling AI scales in May. In early June, Bloomberg reported that Point72 was seeking to raise its own $1 billion hedge fund for AI investments on the public markets.
Among Point72’s venture arm’s most notable fintech holdings is Forbes Fintech 50 listeners MX Technologies AND Vestwell. One of the big winners expected for the fund is digital trading startup DriveWealth, which lifted up $450 million with a valuation of nearly $3 billion in 2021.
The cuts to the fintech team come seven months after the departure of Pete Casella, founding partner of Point72 Ventures and former partner on the fintech investment team. Point72 Ventures may still invest in fintech opportunities selected by its remaining teams, such as its consumer startup group, a source said.
But the departures will still prove an unwelcome complication for the startups that took Point72 Ventures’ money into fintech and cryptocurrencies. For companies in those sectors looking to raise in the future, the moves also bring with them a warning: At least one capital allocator is (mostly) closing up shop for them.