ChAI, a London-based startup that uses artificial intelligence (AI) and machine learning to predict commodity prices, has secured a seed round to help expand its industry-leading services into new markets, including raw-material businesses and key supply chain providers.
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
Investment in risk insurance products
The funding will enable them to invest in developing commodity risk insurance products that will enable 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 enable larger companies and material providers to transfer financial risk for a variety of raw materials, including plastic and steel.
ChAI employs unique data sets, such as satellite imagery and maritime transport data, to provide unprecedented visibility and confidence in price fluctuations and movements of the world’s key raw materials, such as oil, aluminium, copper, and others.
Founded by Marcus Dixon, Michael Button, Silvi Wompa, Stephen Butler, Tristan Fletcher in 2019, ChAI is democratising tools, techniques, and data while combining cutting-edge AI techniques with new alternative data sources to eliminate risk in physical supply chains. This helps businesses better mitigate shocks to their cash flows and profit and loss statements, allowing them to plan for the future and be more resilient.
Last month, the company announced a significant data-licensing agreement with S&P Global Commodity InsightsTM, the independent provider of commodities and energy market information, analysis, events, and benchmark prices. The agreement allows ChAI to provide new customers, supply-chain providers, and investors with real-time commodity price forecasts based on Platts price assessments.
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, said: “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.”