Billionaire Steve Cohen’s venture capital arm, Point72 Ventures, is making a significant shift in its investment strategy, moving away from fintech and crypto investments. The firm has reportedly laid off five investors focused on those areas and will now be redirecting its focus towards artificial intelligence and defense technology startups. Partners Tripp Shriner and Sugam Sarin are also expected to leave, although there is a possibility they may remain to support existing portfolio companies. Point72 Ventures, founded in 2016, has invested around $1 billion in over 100 startups across various sectors.
Fintech startups, which aimed to disrupt traditional financial institutions with innovative technology and products, had seen a surge in funding in 2021. However, the sector has faced a decline in valuations recently, with venture funding down by 70%. In contrast, funding for artificial intelligence startups has been on the rise, with notable investments in companies like Elon Musk’s xAI and Scale AI. Point72 Ventures is reportedly looking to raise a $1 billion hedge fund for AI investments on the public markets, signaling a shifting focus towards this area.
Noteworthy fintech investments for Point72 Ventures include companies like MX Technologies and Vestwell. DriveWealth, a digital trading startup, is expected to be a significant winner for the fund after raising $450 million at a nearly $3 billion valuation in 2021. The recent cuts to the fintech team come after the departure of Pete Casella, the founding partner of Point72 Ventures and a former partner on the fintech investment team. While the firm may still consider select fintech opportunities from other teams, the departure of key investors may impact future investments in the sector.
The changes in Point72 Ventures’ investment strategy are likely to have implications for startups in the fintech and crypto sectors, as the firm had been a significant player in these markets. With the firm mostly closing its doors to these sectors, companies in those areas may face challenges in securing funding in the future. The shift towards AI and defense technology investments reflects a broader trend in the venture capital space, with a growing emphasis on emerging technologies and sectors with high growth potential. It remains to be seen how these changes will impact the startup ecosystem and the overall investment landscape in the coming months.
