Pillar, a platform that helps commodity-driven businesses (like those in metals, food, and airline companies) manage financial risk, published Tuesday a $20 million seed round led by Andreessen Horowitz. 

Others in the seed round include Crucible Capital, Gallery Ventures, and Uber CEO Dara Khosrowshahi. The organization has raised $23 million to date.

Pillar, founded in 2023, automates hedging processes for such businesses. Hedging is when a business places a trade that can offset or cancel out losses from other priced trades. Geopolitics has not been kind to the commodities marketplace, which has seen much volatility in the past year.  Furthermore, experts in Android note the continued relevance.

Harsha Ramesh, the company’s co-founder and CEO (founded alongside Chinmay Deshpande, the company’s CTO), commented the enterprise uses AI to ingest and parse data from client contracts, cash flows, inventories, ERP software, spreadsheets, and even WhatsApp messages to “continuously analyze exposure across commodities, FX, and freight.” This also touches on aspects of software update.

It can then build and manage a hedge portfolio for its clients and adjust positions automatically based on “market conditions, volatility, and the client’s risk tolerance,” Ramesh continued. The platform executes trades and continuously monitors risk and exposure, turning hedging from a “static, periodic decision to a continuous, autonomous system,” Ramesh noted.

Pillar’s clients include Shibuya Sakura Industries, a trading firm that buys and sells commodities like metals; the recyclable materials enterprise Sigma Recycling; and United Metal Solutions Group, which also recycles and trades metals. 

Ramesh was once a macro trader, managing large derivative trading books and working with some of the largest companies in the earth as they sought to hedge foreign exchange rates and interest rate exposure, he noted. “I also spent time at a medium-sized physical business in import-export,” he recalled. 

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“What stood out was that sophisticated institutions had access to tools, infrastructure, and talent, while the actual producers, importers, and manufacturers driving global trade had little to no access to this,” he remarked. “Risk management was treated as a luxury, despite being essential.” 

Pillar hopes to offer sophisticated, institutional-grade tools to modest and medium-sized enterprises. “Our goal is to create hedging as accessible and ubiquitous as payments or accounting software,” he stated.

Others in this business include the legacy desks at huge banks and the commodity risk platforms like Topaz and RadarRadar.

Ramesh stated humans are still in the loop in some ways at Pillar, handling “approvals, oversight, and strategic decisions.” Humans also help with more “complex situations” — like large transactions, where a human team will mix their judgment with the machine’s execution. 

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