Billionaire Steve Cohen's Point 72 Ventures left the fintech team pivoting toward AI

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Billionaire Steve Cohen's venture capital arm, Point72 Ventures, is moving away from fintech and crypto after laying off five of its investors focused on those sectors. Forbes have learned. The firm will focus more on 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 from Point72 Ventures' digital assets team. Partners Tripp Schreiner and Sugam Sarin are also likely to leave, the sources said, although another said they are likely to stay on the team to support existing portfolio companies. Point72 recently announced the Sarin development on May 1. Schreiner and Sarin did not respond to requests for comment.

“We are always evaluating our portfolio's performance and market opportunities and refining our strategy and resources for what we believe are the greatest opportunities,” a Point72 spokesperson said in a statement. Forbesand declined to comment further.

Cohen's $30 billion hedge fund Point 72 Asset Management, a multi-stage firm, closed a $1 billion fund in 2017. Of those investments, 65 are in fintech startups, according to its corporate website.

Fintech startups promise to disrupt old-school banks, insurers and credit card companies with cutting-edge technology, sleek design and new financial products like access to earned wages or quick direct deposits. According to CB Insights, in 2021, the category reached its highest level of funding, raising more than $140 billion in 5,474 funding rounds. However, fintech startup valuations have fallen dramatically since then. Venture funding in the sector is down 70%.

By comparison, funding for artificial intelligence startups has outpaced non-AI startups in recent months, with $6 billion and $1 billion in funding for Elon Musk's xAI and data labeling unicorn Scale AI in May. With rounds. In early June, Bloomberg reported that Point72 was looking to raise its $1 billion hedge fund for AI investments in the public markets.

Notable fintech holdings for Point72's venture arm include; Forbes Fintech 50 listers MX Technologies and Vestwell. An expected big winner for the fund is digital trading startup DriveWealth, which raised $450 million at a valuation of around $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 of the fintech investment team. Point 72 Ventures may still invest in select fintech opportunities from the rest of its teams, such as its consumer startup group, a source said.

But the departure will still prove an unwelcome complication for startups that have taken money from Point 72 Ventures in fintech and crypto. For companies in these sectors looking to grow in the future, there is also the warning that at least one capital allocator is (mostly) closing up shop for them.

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