AI-driven commodity intelligence company, Commodities AI Ltd (ChAI), 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, as well as its capabilities of providing key information to a range of stakeholders as the commodity markets continue to experience significant volatility.
Under current market conditions supply chain providers require long-term forecasting to address global food security challenges.
ChAI uses purpose-built AI technology to analyse thousands of data sets to identify what variables are driving market prices.
At the same time, through the use of AI technology, the company is able to predict raw material costs, highlight risk exposure and help its clients purchase the necessary commodity products effectively.
Moreover, ChAI is currently on a mission to enable organizations to capture more margin, optimise hedging and reduce exposure across the commodities market. The company was launched in 2019 by its co-founders with a parametric insurance product in mind that would protect clients from drastic changes in commodity prices.
The AI-driven company’s market intelligence tool has the technical capabilities to price insurance premiums and simulates underwriting portfolios. However, 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.
Additionally, the funding will also allow larger companies and material providers to transfer financial risk for many raw materials such as plastic and steel.
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.
The company’s innovation helps better mitigate shocks to company cash flows and P&Ls, therefore enabling businesses to plan better for the future and be more resilient.
Last month the company announced a significant data-licensing agreement with S&P Global Commodity Insight, which enables ChAI to provide real-time commodity price forecasts based on Platts price assessments to new customers, supply-chain providers and investors.
Richard Chattock, CEO at Insurtech Gateway, said: “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.”
Andre Ronsoehr, Investment Director at Seraphim Space, added: “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.”
