Billionaire Steve Cohen’s venture capital arm, Point72 Ventures, is pivoting away from fintech and crypto after laying off its five investors focused on those areas, Forbes has learned. The firm will instead shift more focus to investing in artificial intelligence and defense technology startups, according to two people with knowledge of the situation.
The departures include three fintech-focused investors and two investors on Point72 Ventures’ digital assets team. Partners Tripp Shriner and Sugam Sarin are also likely to leave, the sources said, though another stated there is a chance they remain on the team to support existing portfolio companies. Point72 had announced Sarin’s promotion as recently as May 1. Shriner and Sarin did not respond to requests for comment.
“We are always evaluating our portfolio’s performance and market opportunity and optimizing our strategy and resources around what we think is the biggest opportunity set,” a Point72 spokesperson said in a statement to Forbes, and declined further comment.
A multi-stage firm funded by Cohen within his $30 billion hedge fund Point72 Asset Management, Point72 Ventures closed a $1 billion fund in 2017. It’s invested in more than 100 startups since, across fintech, artificial intelligence, consumer, enterprise and defense technology. Of those investments, 65 have been in fintech upstarts, per its corporate website.
Fintech startups promised to disrupt old school banks, insurers and credit card companies with modern technology, sleek designs and new financial products like earned wage access or early direct deposits. In 2021, the category reached a funding high, raising more than $140 billion across 5,474 funding rounds, according to CB Insights. However, since then fintech startup valuations have fallen dramatically; venture funding in the sector is down 70%.
By comparison, funding for artificial intelligence startups has outstripped non-AI startups in recent months, with $6 billion and $1 billion funding rounds for Elon Musk’s xAI and data labeling unicorn Scale AI in May. Earlier in June, Bloomberg reported that Point72 was looking to raise its own $1 billion hedge fund for AI investments on the public markets.
Notable fintech holdings for Point72’s venture arm include Forbes Fintech 50 listers MX Technologies and Vestwell. One expected big winner for the fund is digital trading startup DriveWealth, which raised $450 million at a nearly $3 billion valuation in 2021.
The cuts to the fintech team come seven months after the departure of Pete Casella, founding partner of Point72 Ventures and a former partner on the fintech investment team. Point72 Ventures could still invest in select fintech opportunities from its remaining teams, such as its consumer startup group, one source said.
But the departures will still prove an unwelcoming complication for startups that took Point72 Ventures’ money in fintech and crypto. For companies in those sectors looking to raise in the future, the moves also bear a warning that at least one capital allocator is (mostly) closing shop to them.
