main incubator invests together with UAE based VC Forest Capital in FinTech startup 21strategies

Press release of main incubator, 20.04.2020

  • 21strategies’ machine learning based solution, HEDGE21TM, allows for precision hedging, improving the financial resilience of corporate clients
  • main incubator, the R&D unit and early stage investor of Commerzbank Group, and UAE based VC Forest Capital invest a seven-digit amount in the company
  • 21strategies offers optimization of hedging processes to protect companies’ bottom lines from losses incurred in currencies or commodities

Machine learning, artificial intelligence and cognitive machines are on the rise in every business. CFOs and their treasuries are not exempt from the spread of these smart machines, which become more and more capable of supporting treasurers with cognitive tasks.

Large parts of hedging processes in currency and commodity management within corporate treasury departments have already been automated. The decision, however, when and to which extent hedging transactions are concluded, is still to be made by a human being and in not few cases just rely either on long industry experience or even worse just on gut feeling. There is no data based and automated solution available in the market which supports the hedging decision process of treasures and CFOs.

21strategies’ solution closes this gap in the largely software-supported process of hedging adversarial market moves. A treasurer, who relied on a rigid business process to counter the uncertainty of market moves and to decide – all manually – when and in which extent to buy a currency or a commodity hedge, receives nowadays a daily decision support with the help of 21strategies’ smart digital assistant, called HEDGE21TM.

“As a European leader in commodity risk management, we know about the challenges companies are facing with regard to hedging decisions. 21strategies and its innovative solution, HEDGE21TM, provides more effective and hence more successful risk management for clients, seeking to be supported in their risk management”, states Roman Schmidt, Head of Capital Markets at Commerzbank.

“21strategies and its solution HEDGE21TM are closing an enormous gap in today’s risk management of corporates. HEDGE21TM helps them to run their financial business based on real time data; more stable, less insecure and much better than in the past. With our investment in 21strategies, we can provide this important solution helping corporate treasurers to make better hedging decisions and we believe in the tremendous market potential of this solution”, states Christoph Osburg, Senior Investment Manager at main incubator.

Charbel M. Abou-Jaoude, Director of Forest Capital Holdings, says: “HEDGE21TM leverages an advanced technological approach to manage currency and commodity exposures. Forest, through our various investments, will contribute our network of relationships in both the EMEA region and the U.S. as we are confident that international clients operating in global markets will embrace this innovative path to risk management.”

The flagship offering HEDGE21TM consists of two large software systems: a real-time situational assessment of currency and commodity markets, the Recognized Market PictureTM, and the Hedge Controller. Both components link the corporate hedging process to market awareness and the automation of the formerly manual task of decision-making when 21strategies computes the optimal hedge position in real-time.

“HEDGE21TM is cognitive, but not a black box”, explains Yvonne Hofstetter, founder and CEO of 21strategies. “It fuses 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 corporate’s individual hedging process and calculates what the optimal hedging action is in a certain state.”

Operating out of the wider Munich area, 21strategies targets international large cap businesses, insurance companies and asset managers.