Citi has invested in Exponential Markets, a fintech startup that is developing tradable financial instruments for new and underserved markets, such as the automotive sector.
Exponential Markets, formerly branded Exponential Exchange, announced a strategic investment from Citi through its Markets Strategic Investments unit. The investment was part of Exponential’s seed round, which raised over $10 million from various venture capital firms.
Exponential Markets is creating a series of next-generation financial instruments that offer new levels of hedging capabilities and risk management for participants in a variety of asset classes. The company’s first product, the Exponential Used Vehicle Index, is a tradable index that allows rental car companies, auto insurers, and auto lessors to hedge used vehicle price risk.
Citi’s investment and partnership reflect its support for market-based solutions to address emerging risks in the economy, driven by technological advances. Citi intends to collaborate with Exponential to cultivate the market for its used vehicle derivatives, as well as jointly develop new products for other asset classes and industries.
Ryan Naughton, CEO and co-founder of Exponential Markets, said that having investors and strategic partners connected to their multi-sided market will help them kick start trading and build liquidity. He added that the investment and support from Citi are a testament to their vision and ability to execute.
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