The startup is developing a financial platform that facilitates the trading and brokering of commodities and derivatives, enabling organizations to manage risk effectively. By creating a modern exchange tailored for emerging assets, the platform aims to enhance the availability of structured financial products and drive economic growth.
Funding
$10.1M raised to dateRaised to date based on public sources. This may differ from the amount the company actually raised and is based only on what is publicly available on the internet.
Founders
Product
Problem
Automotive industry participants, including manufacturers, rental car companies, and insurers, face increasing financial risks due to the heightened volatility in used vehicle prices, driven by factors like EV adoption and supply chain disruptions. Traditional risk management solutions are often inadequate or uneconomical, leaving businesses exposed to significant earnings volatility and potential financial instability.
Solution
Exponential Markets provides a suite of financial products, including indices and derivatives, designed to mitigate risks associated with used vehicle price volatility. Its flagship product, the Exponential Used Vehicle Index (AUTO Index), serves as a benchmark for the automotive industry and underlies cash-settled derivatives that allow companies to hedge against residual value exposure. By offering standardized contracts and transparent pricing, Exponential Markets enables efficient risk transfer, improves capital efficiency, and brings stability to businesses navigating the rapidly changing automotive landscape. The company's solutions cater to a range of clients, from automotive manufacturers seeking to future-proof asset exposure to financial firms looking to access a new asset class.
Target Audience
The primary target audience includes automotive manufacturers, rental car companies, auto insurers, subprime lenders, and financial firms seeking to manage risks associated with used vehicle price volatility or gain exposure to the automotive market.
Features
- Exponential Used Vehicle Index (AUTO Index) that tracks wholesale used vehicle prices
- Exponential Electric Vehicle Index to measure price fluctuations in the EV market
- Cash-settled derivatives contracts based on the Exponential AUTO Index
- Standardized contracts listed on a regulated exchange (planned for the latter half of 2024)
- Over-the-counter (OTC) swaps and swap options for customized risk management
- Transparent pricing and market-determined values
- BMR compliant third-party calculation agent (Solactive) for index administration
- Index Governance Committee with industry experts for oversight
- Access to historical data and analytics through platforms like Bloomberg, Morningstar, and FactSet