Arjun Sethi, the former CEO of Tribe Capital, appeared on CNBC’s “Closing Bell: Overtime” on March 28 to discuss the ramifications of Sam Bankman-Fried’s (SBF) trial and sentencing on the crypto industry.
Arjun Sethi is a distinguished figure in the entrepreneurial and investment landscape, holding key positions as the Co-Founder, Chairman, and Chief Investment Officer of Tribe Capital, a venture capital firm founded in 2018 that oversees assets exceeding $1.6 billion and has invested in startups such as Carta, Relativity Space, Airtable, MoonPay, and Kraken. Tribe Capital stands out in the venture capital and cryptocurrency sectors for its innovative use of artificial intelligence and data science to maintain a competitive advantage. __
Before joining Tribe Capital, Sethi was integral to Social Capital as a Partner leading a venture team focused on early-stage investments in both consumer and enterprise domains. His investment successes at Social Capital feature companies like Front, Carta, Swarm (which was acquired by SpaceX), Slack, Cloud Kitchens, and Relativity Space. Sethi is celebrated in Silicon Valley as a top angel investor, with investments in prominent companies like Frax, Snapchat, Lyft, OpenDoor, and Gusto through various investment methods.
His entrepreneurial journey includes founding and successfully exiting two companies; his venture, MessageMe, was acquired by Yahoo, leading to his significant role in Yahoo’s executive team, where he contributed to escalating mobile product usage. Additionally, Sethi founded and led LOLapps, a mobile gaming company that achieved 100M monthly users before its sale at $240M.
Sethi began by reflecting on the journey the crypto industry has undergone, especially in light of the FTX bankruptcy filing in November 2022. The sentencing of SBF not only marks the closure of a tumultuous chapter but also signifies a critical moment for the crypto industry’s evolution. According to Sethi, the industry has navigated through regulatory frameworks and the approval of spot Bitcoin ETFs in the U.S. and endured a crypto winter, emerging stronger on the other side. He emphasized the distinction between centralized and decentralized finance and exchanges, highlighting the resilience and accelerated pace of growth within the crypto sector.
FTX’s downfall was described by Sethi as a “blip in the radar,” acknowledging that bad actors exist across all industries. However, he stressed that the crypto industry has become increasingly resilient, with both retail and institutional investors worldwide contributing to its strength and momentum. The industry’s ability to move forward and grow stronger through adversity was a key point of discussion.
Beyond the immediate implications of the SBF sentencing, Sethi discussed his new venture, Termina, which has been spun out of Tribe Capital. Termina is a subscription-based AI software platform designed for quantitative diligence. Sethi outlined the importance of understanding the source of data and its utilization in the context of AI and generative AI technologies. He underscored that Termina represents not just his life’s work but also that of his team, leveraging one of the largest proprietary data sets of private companies globally, encompassing crypto, public markets, and private markets.
Addressing the potential for disillusionment with AI, Sethi drew parallels to the late 1990s tech boom and subsequent bust. He hinted at the cyclical nature of hype and disillusionment, suggesting that we might witness a similar phase with AI before realizing its full business potential.
Sethi elaborated on the current enthusiasm surrounding AI, comparing the contemporary tech landscape to the dot-com era of the late 1990s. Unlike the speculative bubble that characterized the tech industry back then, where companies with minimal substance received massive investments based on hype, Sethi pointed out a key difference in today’s environment. Modern companies, particularly those in the AI domain, are not just ideas on a napkin but entities with real revenues, scaling at unprecedented rates.
He highlighted how traditional industries are adopting software, machine learning, and AI to become more efficient. This technological adoption, he argues, enables companies to do more with fewer resources, leading to significant cost reductions and enhanced customer experiences. Sethi shared an example of Klara, a company planning to go public, which has reportedly reduced customer service costs by 80% through AI integration.
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