Chinese fintech giant Ant Group is reportedly divesting its $100 million investment in A&T Capital, a move that signals its retreat from the volatile crypto market. A&T Capital, established in April 2021 with significant backing from Ant Group, had been a major player in the crypto sector, investing in startups like Matrixport and ConsenSys.
The decision to withdraw its investment comes on the heels of A&T Capital’s co-founder Yu Jun’s resignation due to allegations of workplace misconduct. Yu Jun, a former executive at Ant Group, played a crucial role in setting up A&T Capital as part of Ant’s push into offshore crypto projects.
With Ant Group pulling out of the investment, the future of A&T Capital is uncertain. It’s unclear whether the firm will continue to operate independently or seek new investors. As of September 18, A&T Capital’s website displayed a timed-out error, adding to the uncertainty surrounding its fate.
Ant Group’s move to divest from A&T Capital coincides with a broader decline in venture capital funding for the crypto sector. In June, crypto venture funding reached its lowest point since 2020, with a 23% drop from the previous month, totaling just $520 million raised across 84 funding rounds.
The decision also comes as Ant Group shifts its focus away from crypto and toward artificial intelligence (AI). The company recently unveiled a finance-specific AI model and began testing it for various consumer and professional applications. This marks Ant Group’s entry into China’s competitive AI market, where it faces competition from over 130 other companies offering similar AI models.
Ant Group, owned by Alibaba’s Jack Ma, is one of the world’s largest financial service firms. Its recent quarterly profits increased by 17.4%, signaling a rebound after facing regulatory challenges in China, including a significant fine of 7.12 billion yuan ($985 million) for various regulatory violations.
The move away from crypto investments reflects a broader trend of increased interest in AI technology among venture capitalists. Crypto venture funding has been on the decline, while AI funding has seen growth since 2020.
Overall, Ant Group’s decision to divest from A&T Capital underscores the evolving landscape of fintech investments, with a shift away from crypto in favor of AI-driven innovations. The future of A&T Capital remains uncertain, and the crypto sector continues to face challenges amid changing market dynamics.