Commodities AI Ltd (ChAI), an AI-driven commodity intelligence company, has completed a seed round to expand its industry-leading services into new markets and provide real-time commodity price forecasts to new global audiences, including commodity companies and key supply chain providers.
The funding announcement marks an important milestone in ChAI’s product development and ability to provide important information to a range of stakeholders as commodity markets continue to experience significant volatility.
Under current market conditions, supply chain providers need long-term forecasts to address global food security challenges.
ChAI uses purpose-built AI technology to analyze thousands of data sets to determine 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, identify risks and help its customers to effectively purchase the necessary raw material products.
Additionally, ChAI is currently on a mission to enable organizations to achieve more margin, optimize hedging and reduce exposure to the commodity market. The company was founded in 2019 by its co-founders with a view to providing a parametric insurance product that would protect customers from drastic changes in commodity prices.
The AI-driven company’s market intelligence tool has the technical capabilities to price insurance premiums and simulate underwriting portfolios. However, this latest round of funding allows them to invest in building commodity risk insurance products to allow smaller companies underserved by existing risk transfer solutions such as options or futures markets to transfer commodity price risk and derivatives.
In addition, the financing also enables larger companies and material providers to transfer the financial risk for many raw materials such as plastic and steel.
ChAI democratizes the tools, techniques and data that have long given speculators a competitive edge by combining cutting-edge AI techniques with exciting new alternative data sources to de-risk physical supply chains.
The company’s innovation helps to better mitigate shocks to the company’s cash flow and income statement, allowing companies to better plan for the future and be more resilient.
Last month, the company announced a significant data license agreement with S&P Global Commodity Insight, enabling ChAI to provide real-time commodity price forecasts based on Platts price assessments to new customers, supply chain providers and investors.
Richard Chattock, CEO of Insurtech Gateway said: “Welcome to Insurtech Gateway ChAI. Industrial supply chains face increasing commodity price volatility, with the majority lacking access to hedging tools. ChAI solves this problem with a smart price protection solution backed by insurance. We look forward to helping you test and scale this model. We were really impressed with ChAI’s deep data insights into market and price dynamics.”
Andre Ronsoehr, Investment Director at Seraphim Space added, “Chai is already empowering companies in some of the largest and most important industries globally by enabling them to better manage their commodity price risk. Now ChAI’s upcoming insurance product has the potential to be an absolute game changer for these companies. We are very happy to support the founders and the team of ChAI and look forward to an exciting journey.”