- Billionaire Steve Cohen’s Point72 Ventures is a growing player in the crypto space.
- Adam Carson leads Point72 Ventures’ crypto strategy, which has made five investments in nine months.
- Carson walked Insider though the firm’s process for sourcing and valuing different investments.
Last year, billionaire Point72 founder Steve Cohen went to his venture capital unit and said he was ready to start investing in crypto.
Nine months later, his firm has backed five firms in the crypto infrastructure with plans to start investing in tokens this year, according to Adam Carson, who runs the strategy for Point72 Ventures.
The firm has been deliberate about where its putting its capital in regards to crypto. Carson’s team has modeled its approach after the venture unit’s fintech strategy, which is focused on infrastructure companies that connect incumbents to new technologies.
Cohen was pushed by his son to explore the space, he said at the annual SALT Conference last September, and has said in past public appearances that he’s not so much interested in individual coins as he is in the technology underpinning the space.
But the space is moving quickly, with several of Point72’s investments already raising another round just months after the firm’s first bet. Crypto startup Zero Hash, for example, just announced its $100 million Series D fundraise less than half of year after its $30 million Series C round, both of which Point72 were investors in.
“Valuations are pretty crazy right now, but the infrastructure plays have the revenue to back it up,” Carson said in an interview with Insider.
The ventures team’s crypto strategy mimics the firm’s fintech thinking by starting with a survey of institutions and incumbents to determine what problems they have with digital assets — and then investing in the companies that address those issues. This included the venture team talking with personnel in Point72’s hedge fund arm about their troubles investing in crypto.
“They told us ‘we need all the tools, we need all the market data.’ They essentially wanted the same things they have when they trade equities and FX,” Carson said. This led to Point72 backing crypto analytics firm Messari, he said. Banks that talked with Carson, meanwhile, wanted the ability to offer high-net-worth clients and institutions exposure to crypto without owning the securities themselves, leading to Point72’s investment in 24 Exchange.
“There needs to be bridges built,” Carson said. “It’s really an infrastructure play at this point.”
But Carson envisions a bigger future for both the strategy and crypto going forward. He believes web 3.0 will give users more ownership of their data and content, thanks to the blockchain technology that drives crypto investments, telling Insider that we are currently in “the five-year period of figuring what web 3.0 actually is.”
For the time being, Point72 Ventures will continue backing its first five portfolio companies and building bridges between incumbents and new players, while also expanding to investing in tokens themselves this year, Carson said.
“It’s been exciting and moving fast. There’s a little bit of scrambling to keep up — in a good way,” he said.
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