Commodity AI firm ChAI secures seed round funding to expand into AI insurance services
TL;DR
- ChAI uses proprietary AI technology to provide real-time commodity price forecasts for multinational material companies and supply-chain providers through a smart price protection solution backed by insurance.
- The funding round will allow ChAI to build and expand commodity insurance products for smaller companies for the first time – imperative in a period of increasing price volatility.
- The investment round was led by the space-focused venture capital fund Seraphim Space with participation from Insurtech Gateway, Passion Capital, Primo Space Fund, 2050Cap and Portfolio Ventures
The full story
Commodities AI Ltd (ChAI), the AI-driven commodity intelligence company, has completed a seed round to help expand its industry-leading services into new markets, providing real-time commodity price forecasts to new global audiences, including raw-material businesses and key supply chain providers.
The funding announcement marks an important milestone in ChAI’s product development and capabilities of providing key information to a wide range of stakeholders as the commodity markets continue to experience significant volatility. Under the current market conditions supply chain providers require long-term forecasting to address global food security challenges. ChAI uses purpose-built AI to analyze thousands of data sets to identify what variables are driving market prices, predict raw material costs, highlight risk exposure and help its clients purchase the necessary commodity products effectively.
“Welcome to Insurtech Gateway ChAI. Industrial supply chains face increasing price volatility in commodities with the majority unable to access hedging tools. ChAI solves this problem through a smart price protection solution backed by insurance. We are delighted to help you prove out and scale this model. We were really impressed by ChAI’s deep data insights into market and pricing dynamics. “
Richard Chattock, CEO at Insurtech Gateway
The company is on a mission to enable organizations to capture more margin, optimise hedging and reduce exposure across the commodities market. ChAI’s co-founders launched the company in 2019 with a parametric insurance product in mind that would protect clients from drastic changes in commodity prices.
The company’s market intelligence tool has the technical capabilities to price insurance premiums and simulates underwriting portfolios. Now, this latest funding round will allow them to invest in building commodity risk insurance products to allow smaller companies that are underserved by existing risk transfer solutions, such as options or futures markets, to transfer commodity price risks and derivatives. It will also allow larger companies and material providers to transfer financial risk for many raw materials such as plastic and steel. This is increasingly important over the short term as commodity markets continue to experience significant volatility, as well as addressing global food security over the long term. By facilitating timely access to commodity prices and providing forecasts and drivers for price changes, ChAI can significantly help to limit extreme food price volatility.
ChAI is democratizing the tools, techniques and data that have long given speculators a competitive edge – combining state-of-the-art AI techniques with exciting new alternative data sources to take the risk out of physical supply chains. Their innovation helps better mitigate shocks to company cash flows and P&Ls – enabling businesses to plan better for the future and be more resilient.
“Chai is already empowering businesses across some of the largest and most important industries globally by allowing them to better manage their commodity price exposure. Now, ChAI’s upcoming insurance product has the potential to become an absolute game changer for these businesses. We are very happy to support the founders and team at ChAI and look forward to an exciting journey.”
Andre Ronsoehr, Investment Director at Seraphim Space
Last month the company announced a significant data-licensing agreement with S&P Global Commodity Insights™, the leading independent provider of information, analysis, events, and benchmark prices for the commodities and energy markets. The agreement enables ChAI to provide real-time commodity price forecasts based on Platts price assessments to new customers, supply-chain providers and investors.
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