Stable, a startup and Agri-TechE member, is changing the way businesses manage volatile commodity prices, it has secured $46.5m to drive its US expansion.
Founded in 2016 by a farmer’s son Richard Counsell, while he was working in Chicago, the Stable platform enables millions of businesses to manage the risk in a simple and effective way.
Counsell comments: “I know the problems volatile c
ommodity prices can cause first hand, and I was struck by how little innovation has happened in the industry.
“Agricultural commodities are perishable and come in all shapes, grades and sizes, which makes them very hard to standardise and trade on an exchange,” said Counsell. “The result is that only 8% of commodities are available to trade on the likes of the CME Group Inc*, which makes purchasing risk management products such as futures or options contracts difficult without enormous basis risk.”
“Back in 1848 when the Chicago Board of Trade opened its doors, it had a simple and clear mission to provide buyers and sellers of crops financial certainty. I wanted to combine modern tools like machine learning (AI), with a great user experience and a clear and client-focused purpose to get back to the grassroots and become relevant again for businesses with a real risk to manage.”
Stable’s platform hosts more than 5000 indexes which can be selected by clients to customise a contract to protect themselves from volatile prices. Payouts are automated and simply reference the local or highly correlated index to minimise basis risk. The result is a simple and modern way to manage price risk for millions of businesses globally. Currently focused on agricultural commodities, the company is widening its future offering to include packaging, construction & energy.
The company is seeing exceptional demand caused by the disruptions in the Covid impacted food chain, which has highlighted the risks involved for manufacturers and producers alike.
In the agrifood industry alone, more than $5 trillion of un-traded commodity exposures are currently self insured. Hedging can also be a complex, risky and intimidating experience for a business simply wanting to protect their risk rather than trade or speculate. After gaining regulatory approval in early 2021, Stable is now starting to work with many large food businesses in the US, as well as farming organisations wishing to protect against future price falls.
With operations in Chicago, Austin and NYC, the new investment will be used to build out its North American sales and marketing teams and invest in its world class data science departments in London & New York.
The Series A round of funding, was led by Greycroft as well as Notion Capital, Anthemis, Continental Grain and existing investors Syngenta and Ascot.
“Stable has a proven leadership team and is on track to reach $500m of annual premium within 3 years of launch, making them the fastest growing insurtech ever,” said Ian Sigalow, a Partner at Greycroft. “We’re delighted to support a company with this level of ambition and industry experience.”
*CME Group Inc. is an American global markets company. It is the world’s largest financial derivatives exchange, and trades in asset classes that include agricultural products, currencies, energy, interest rates, metals, stock indexes and cryptocurrencies futures. (source wikipedia)
An explanation of the Stable technology.
To find out more about Stable visit www.stableprice.com or email hello@stableprice.com