21strategies automates decision-making in hedging, a process used to hedge financial risks. The startup from Zolling in the Freising district has secured a seven-figure investment.
Hedging attempts to mitigate price, exchange rate, and interest rate risks of a transaction through counter-investment. For example, if an exporter is paid in the buyer's local currency, there is a risk that the exchange rate will fall during the export transaction, causing the company to lose money. However, if a company invests a certain amount in a declining exchange rate, it will lose money on the actual transaction if the exchange rate falls, but can offset this loss through the counter-transaction. Hedging therefore serves to make risks more calculable.
A large portion of such hedging processes in the area of currency and commodity management are already largely automated. However, the decision as to when and to what extent hedging transactions are concluded is often still made by humans. The data-based solution 'Hedge21' is intended to automate these decisions.
Yvonne Hofstetter, founder and CEO of 21strategies, says about her company's product:
"It combines quantitative and qualitative information such as interest rates, inflation rates, GDP growth, and geopolitical developments provided by the markets with internal constraints imposed by a company's individual hedging process, and calculates the optimal hedging measure at a given point in time."
“21strategies and its solution Hedge21 close a huge gap in today’s corporate risk management”
With this solution, the startup was able to convince the investment arm of Commerzbank Main Incubator and Forest Capital from the United Arab Emirates to make a seven-figure investment. Roman Schmidt, Head of Capital Markets at Commerzbank, says:
“21strategies and its innovative solution, Hedge21, offers more effective and therefore more successful risk management for clients who want support in this area.”
Christoph Osburg, Senior Investment Manager at Main Incubator, says:
"21strategies and its Hedge21 solution close a huge gap in today's corporate risk management. Hedge21 helps them operate their financial business based on real-time data, making it better and more secure. We believe in the enormous market potential of this solution and are pleased that our investment allows us to offer this innovative solution to interested companies to improve their hedging decisions."
