Stable launched its risk management platform at RICS HQ in London, with speakers NFU Deputy President Guy Smith and former Minister of State for Agriculture George Eustice MP.
The platform is initially focused on food and farming businesses in over 15 countries around the world. Stable has raised $6m in seed funding from Anthemis, Syngenta Ventures, Baloise and Ascot Underwriting.
Price volatility is a major risk to sellers and buyers, yet the current financial tools to deal with price risk are currently designed for financiers, rather than farmers. Farmers require a minimum of 2,000 acres to justify a Futures account, but less than 1% of the world’s 500 million farmers farm over 250 acres. Just 10 of the world’s top 200 crops are traded on an exchange and the forgotten crops are where Stable operates, as it works to make ‘hedging’ accessible and simple.
Stable’s data science platform prices the risk and manages the portfolio on behalf of its global capital providers, including insurers and other capital markets, who provide the liquidity and risk capital required. The design of Stable’s algorithms was inspired by the writer A. G. Street’s phrase ‘Up Horn, Down Corn.’ The algorithms are designed to mimic traditional mixed farming as they spread the risk across a wide variety of niche commodities, in many different countries.
This new approach to price risk management is made possible by recent advances in data science and the reduced cost of computational power. Stable’s platform runs 62 trillion simulations a month across the commodity portfolio, adjusting the risk capital in real-time across hundreds of niche commodity indexes.
Richard Counsell, CEO at Stable commented: “Stable’s price risk management platform is the result of over three years of R&D by our world-class team of data scientists and academics. We’re bringing a fintech mentality to the price risk management industry and our current soft commodity indexes will shortly be joined by niche industrial and energy products.”
Find out more about Stable at stableprice.com/