By
Chimamanda U. Martha
January 19th, 2024
The company’s decision to distance itself from A&T Capital comes when the crypto industry is navigating its own set of challenges.
Chinese fintech giant Ant Group is withdrawing its investment from A&T Capital. The crypto venture-focused company received $100 million from Ant Group to invest in offshore crypto ventures, Bloomberg reported Monday, citing people familiar with the matter.
According to the report, the move comes amidst the current market winter coupled with internal challenges for the company.
The financial investment company, established in April 2021 with robust backing from Ant Group, played a central role in Ant’s foray into cryptocurrencies. The fund rapidly gained recognition for its strategic investments, notably virtual asset lending firm ConsenSys, the company behind Ethereum’s cutting-edge software MetaMask.
A&T Capital Founding Partner Accused of Workplace Misconduct
Despite its growing popularity, Ant Group has decided to sell its stake in the company. Although the firm did not reveal the reason behind its decision, the move comes a few months after Yu Jun, a founding partner at A&T, resigned from the management board due to workplace misconduct allegations.
Jun, a former high-ranking executive at Ant Group, was investigated after his departure following the disturbing claims of sexual harassment by him and employees at A&T Capital.
Venture Capital Funding Hits the Rocket as Market Declines
As Ant Group steps away from A&T Capital, the question of what comes next looms. Will A&T Capital forge ahead independently, charting its course in these uncertain waters, or will it actively seek fresh investors? At present, the company’s website remains inaccessible, serving as an ominous backdrop to these questions.
The company’s decision to distance itself from A&T Capital comes when the crypto industry is navigating its own set of challenges. According to recent data from PitchBook, crypto venture funding experienced a noticeable decline during the second quarter of this year, reflecting the lingering market turbulence from the previous year.
RootData, a crypto data provider, also reported a 70% drop in venture capital investments in crypto companies over the past year. In June 2022, the digital asset sector received $1.81 billion across 149 funding rounds. In contrast, this year saw only 83 projects securing $520 million, marking the lowest monthly funding.
Despite occasional increases, this data shows a clear downward trend in VC interest in the digital asset space. For instance, September 2022 set a record high with $1.85 billion in funding across 138 rounds, while June of the previous year had the most recipients, with 149 rounds funded.
This decline in VC investments highlights the industry’s fluctuating nature, with periods of growth followed by quieter phases.
Ant Group Rolls Out New AI Model
Meanwhile, while the crypto industry is expecting a decline in funding, the fintech sector is witnessing a surge of interest in artificial intelligence (AI) technology, a trend poised to reshape the industry.
Ant Group made a significant move earlier this month by introducing a finance-oriented AI model and initiating testing for both consumer and professional applications.
The launch marks the company’s entry into China’s highly competitive AI market. The AI model includes “Smart Wealth” (Zhixiaobao) and a tool tailored for financial professionals known as Zhixiaozhu. These offerings are designed to deliver financial advice and investment analysis.
The tools are currently undergoing closed testing and are subject to China’s stringent regulatory clearance processes, prioritizing safety and compliance to ensure their readiness for broader use.