- Tripp Shriner is a managing partner at Point72 Ventures, the VC arm of Steve Cohen’s hedge fund.
- Fintechs suffered from a lack of funding and IPOs in the year, but there are signs of a rebound.
- Shriner outlines three investment areas the VC is excited about and why.
Ask anyone in fintech, and they’ll tell you that the last year has been rough for the industry.
The once white-hot sector has cooled significantly. Deal count has been on the decline since the beginning of 2022. But there’s a silver lining for some investors, like the venture-investing arm of Steve Cohen’s hedge fund Point72, which has spent the past year strategizing about what’s next for the firm.
Point72 Ventures is now actively looking for new fintech investments after what it said was “a quieter period”— it last invested in payment startup Pagos’ $34 million Series A in February.
“We’re still early, getting toward the check-writing side of things,” Tripp Shriner, managing partner and fintech investor at Point72 Ventures, told Insider.
Shriner gave a peek inside the firm’s investment playbook and areas of interest moving forward, including scaling identity verification, capitalizing payments in the videogame industry, and how generative AI could be used in risk and wealth management. The investment themes lay the groundwork for where Point72 Ventures will spend its time and money in the coming months and years.
Videogame payments and currency exchanges
Point72 Ventures is in the early innings of exploring the role of payments within gaming. It would be a different ballgame for the VC, which has primarily made investments in behind-the-scenes tech powering financial firms.
But Shriner said there’s an unmet opportunity within the gaming industry, a big, global market that continues to grow. The global gaming industry is expected to be worth $321 billion by 2026, according to PwC research, and a recent report from Mastercard found respondents were frustrated with buying in-game currency and the checkout process.
Another area the VC is excited about is creating a currency exchange between different games. Today, each game acts as its own ecosystem: players can pay money to buy skins or other specialty items, more lives, or earn rewards. But if you’re a gamer who plays across six different games, you can’t move cash or rewards or items between games.
But gaming studios want to build connective tissue between disparate games, which can act as a fiat exchange where players can take rewards from one game and use them in another, Shriner said. Not only is it better for the consumer, but gaming studios can release new games, and players won’t feel as tied to older versions after investing their money and time in a particular game.
Generative AI within wealth management
There’s a lot of excitement on Wall Street about generative AI, and firms are already implementing internal use cases, from making software engineers more efficient to helping wealth advisors access data and research faster.
Point72 Ventures’ approach to AI is largely guided by how financial firms want to use the tech. Though many firms are still in an exploratory phase, the surest bets are in wealth management, especially around making advisors more efficient with research and summarization, Shriner said.
Many AI conversations Point72 Ventures has with financial firms start optimistically about the product and experience, and almost every conversation ends with what could go wrong and how to mitigate that risk, Shriner said. The firm is keeping an eye out for solutions that apply AI to combat new fraudulent acts made possible with AI.
“Almost every conversation that we have about gen AI, the conversation ultimately turns to, what can bad actors do with this technology,” Shriner said.
On the hunt for new KYB and KYC solutions
Shriner said that within the broad and complex world of risk and compliance, Point72 Ventures is zeroing in on improving the identification process for businesses and consumers.
“RegTech,” tech that focuses on compliance, has always been one of the “more boring plumbing areas of financial services,” said Shriner. “But it’s one of the most important, and I think that’s one of those that still has a lot of room for innovation.”
A major pain point for financial firms is scaling solutions for Know Your Customer (KYC) and Know Your Business (KYB), regulations that require financial providers to know who they are providing services to.
Most KYB solutions in the market today are too rigid to adapt to evolving regulations quickly and involve a lot of manual work, Shriner said. There are still gaps related to data coverage, and many of the solutions were built for domestic regulations, which fall short as more companies expand internationally.
Meanwhile, KYC is something every financial institution needs to solve for, and each firm does the same process in slightly different ways.
There’s an opportunity for customers to verify their identities and provide documentation to one provider, and for that digital identity to be shared between the firms who require it, similar to how single sign-on authentication lets users log in to multiple apps or websites with one set of credentials.
However, success would depend on financial firms’ willingness to adopt such a fundamental change.
“Big opportunity, it’s just a question of is it too early or are we there now,” Shriner said.
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