Financial risk management platform Pillar raises $20 million in a round led by a16z

Column, l A platform that helps companies that depend on commodities (such as those in metals, food and airline companies) to manage financial risks, it was announced on Tuesday $20 million seed round Led by Andreessen Horowitz.

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

Pillar, founded in 2023, automates hedging processes for such companies. Hedging is when a company makes a trade that can offset or cancel out losses from other priced trades. Geopolitics has not been kind to the commodity market, which has seen a lot of volatility in the past year.

The company uses AI to ingest and analyze data from customer contracts, cash flows, inventories, ERP software, spreadsheets, and even WhatsApp messages “to analyze ongoing exposure across commodities, FX and shipping,” said Harsha Ramesh, the company’s co-founder and CEO (founded alongside Chinmayi Deshpande, the company’s CTO).

He can then build and manage a hedging portfolio for his clients, automatically adjusting positions based on “market conditions, volatility, and the client’s risk tolerance,” Ramesh continued. Ramesh said that the platform executes trades and monitors risks and exposure on an ongoing basis, transforming hedging from “a fixed, periodic decision to an ongoing and independent system.”

Pillar’s clients include Shibuya Sakura Industries, a trading company that buys and sells commodities such as metals; recyclable materials company Sigma Recycling; and United Metals Solution Group, which also recycles and trades metals.

He said Ramesh was once a macro-trader, running large derivatives trading books and working with some of the world’s largest companies as they sought to hedge foreign exchange rates and interest rate exposures. “I also spent some time at a medium-sized physical company in the import-export business,” he recalls.

“What stood out was that sophisticated institutions had access to tools, infrastructure and talent, while the actual producers, importers and manufacturers who drive global trade had little access to that,” he said. “Risk management has been treated as a luxury, even though it is a necessity.”

Pilar hopes to provide cutting-edge enterprise tools to small and medium-sized enterprises. “Our goal is to make hedging as accessible to everyone and everywhere as payments or accounting software,” he said.

Others in this work include legacy offices at major banks and commodity risk platforms such as Topaz and RadarRadar.

In some ways, humans are still in the loop at Pilar, handling “approvals, oversight and strategic decisions,” Ramesh said. Humans also help in “more complex situations” – such as large transactions, where a human team mixes judgment with machine execution.