- London-based AI startup ChAI has just raised a $1.7 million seed round from three of Europe’s top early-stage investors.
- ChAI was founded 10 months ago and raised funds from Passion Capital, MMC Ventures, and Dynamo Ventures.
- The company uses AI and machine learning to provide “signals” to help assess potential changes to commodity prices, a market that could be worth $60 billion.
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London-based artificial intelligence startup ChAI has raised a $1.7 million seed round from three of Europe’s top early-stage investors.
ChAI was founded 10 months ago and raised funds from Passion Capital, MMC Ventures, and Dynamo Ventures.
The company uses AI and machine learning to provide “signals” to help assess potential changes to commodity prices, a market which could be worth $60 billion.
ChAI’s cofounder and CEO Dr Tristan Fletcher estimates that the combined revenue of companies exposed to commodity prices could be $16 trillion, with much of the world’s economy dependent on sensitive changes in the cost of raw materials. Accurate signals about the direction of these changes could help ChAI’s clients anticipate costs, and save millions.
Physical commodity traders alone bring in $100 billion a year of revenue, per Natural Resource Governance.
“When we founded the company we believed there was a real need for a market solution and it was something of a race to get something out there,” Fletcher told Business Insider in an interview. “Fundraising was a long and painful process with a lot of rejection, but as soon as Passion were onboard that changed. Getting such great investors on board is a real coup.”
Fletcher’s background includes a period in academia focused on machine learning and AI applications. The idea for an AI for commodity pricing came out of a trip to China as part of a business trip undertaken with the British government.
The company combines a variety of data sources into its platform which includes satellite data, infrared technology, alongside port and freight information alongside a number of other options.
“The democratization of alternative data has meant that financially it’s easier to get hold of but companies need some way of determining which data sources to subscribe to and how to use it,” Fletcher added.
That’s where ChAI comes in, with its propriety “signals” allowing clients to determine the best ways of interpreting an ever-increasing ream of data about the commodities industry.
ChAI counts a large Thai construction firm as one of its clients already but will also market to banks, commodity traders, speculators, and other parts of the raw materials supply chain.
Eileen Burbidge, partner at Passion Capital, said: “It’s rare and always a privilege to come to work with a team that has such a unique range of skills ranging from leading academia to strong commercial acumen.
“We at Passion were immediately drawn to the fact that many large companies and enterprises which rely on commodities in their supply chain are unlikely to staff their own proprietary desks to predict or anticipate price volatility, but will look for innovative and more accurate forecasts in addition to historical-based models.”
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