Stable has raised a $60 million Series B round to help farmers and food companies better hedge their exposure to commodity price volatility in the face of war and global food security concerns.
How it works:
Stable says it has made hedging — that is, making investments that offset potential business losses — much simpler and less overwhelming for farmers and food businesses with its data science-driven platform.
- Stable founder and CEO Rich Counsell tells AFN the platform has “nearly 8,000 different commodities” on it, allowing for businesses to be “very precise” about matching their specific risks.
- Users can customize their contract and price protection within the platform to effectively insure against price volatility.
- Stable says it only works with businesses “facing real risk, rather than those looking to profit from speculation.”
- Counsell emphasizes that Stable doesn’t take on any of the risk itself.
- Stable’s roster of clients rangers from multinational food and beverage companies to family farms around North America.
Why it matters:
Covid-19, climate change, the war in Ukraine, and other factors are causing supply chain disruptions around the world, leading to increasing price volatility.
Hedging is a complex, risky, and often intimidating process even in the best of times. But Stable says the disruption of commodity markets has sent demand for its platform soaring.
Counsell cites organic grains operations in the US as one group that has increasingly used Stable. “The input costs for those guys, on the feed and fertilizers and everything else, is something that people who have taken out an insurance like policy with us are protected and they are able to keep going,” he says.
How Stable will use the funding:
Counsell says Stable is “super focused” on the US at the moment, with teams in Chicago, New York, and Los Angeles. It also operates in London, Singapore, and Bermuda, and has some clients Colombia and Mexico, too.
Funding will go towards expansion in the US as well as further development of its data-driven platform.
New initiatives will include a financial news aggregator called Stable Media, market visualization and assessment tools via the Stable Data product suite, and the expansion of Stable Risk “from its current focus on options to offering clients swaps and collars [alternative hedging strategies].”
Further down the line, Counsell says the company could start working in more sectors. “At the moment, it’s grains and produce and animal protein, but there’s so much more: feed ingredients, for example, even seafood. It goes on and on, and we just want to do more of that.”