Stable, the US-based commodities risk management service, completed a $60m series B round today featuring agribusinesses Syngenta and Continental Grain that valued it at $170m post-money, founder and CEO Rich Counsell told Global Corporate Venturing
The round was led by venture capital firm Acrew Capital and included Greycroft and Notion Capital, both of which joined Continental, Syngenta, insurance underwriter Ascot and Anthemis in the company’s last round, a $46.5m series A in October 2021.
Counsell told GCV he wanted a diverse investor base with corporate funders contributing their knowledge of the food and agriculture markets.
“I want all those incredible ideas and knowledge of high finance,” he said. “But Syngenta deal with about a million farmers around the world and they are very switched on in terms of what matters, the problems they’re facing, how you distribute – very important, industry-specific things we need to not forget.
“And the same for Continental Grain, they own big food companies and each of them sit there every day talking about the impact of volatile input prices. It gives us expertise and you need those solid foundations, especially when you’re a young company. To me, it’s all about diversification on that front.”
Stable uses artificial intelligence to assess the vast array of commodities unable to be hedged on existing futures markets, allowing users to manage pricing risk and hedge against volatile commodities prices.
“Covid and Ukraine really reminds you just how fragile these supply chains are and just how exposed an awful lot of companies are to really volatile prices,” Counsell said.
“That doesn’t matter if you’re a farmer worried about price falls or if you’re running a smoothie business in London worried about core ingredients doubling in price when you’ve perhaps made a fixed-price sale to someone like Tesco.”
The company’s digital platform enables more than 500 commodities to be hedged and its client base stretches from small farms to major food and drink brands. The product is structured similarly to online insurance and is designed to be straightforward enough to be used by a wide client base.
“Take a UK business for example,” Counsell said. “They come into the platform and there are hundreds of indexes there. Say you’re a craft brewery and your main ingredient is malting barley but not any malting barley, English malting barley.
“Once you find your index for English malting barley, our hedging distils it down into three simple questions: How much do you want to protect, at what index price does it start becoming a real problem for you and how long do you want protection for? That’s it, the platform spits out an insurance [quote] like you were insuring your car, and you either like your premium or you don’t.
“If it goes above the index price you set, say 150% above where it is now or whatever the moment is you start losing money, we just charge you a premium per ton or gallon or whatever the unit is. It is unbelievably simple and deliberately so.”
The round brings Stable’s funding to over $112m since it was founded in 2017. The series B proceeds will be allocated to further development of its data science technology.
The company is also planning to expand the range of options for its Stable Risk product and to launch Stable Media, an online financial news aggregator set to come online in the next six weeks that will curate a large amount of fragmented agriculture data in a single place. It is intended to help clients not only manage but understand their risk.
