A startup that wants to digitize the marketplace for metal commodities like copper, silver, and gold, has raised $33 million.
Switzerland-based Open Mineral aims to bring the trading process, which it claims still largely relies on paper, online. The startup, which was set up by two former asset managers at mining giant Glencore, says its system can disrupt the trading sector in a similar way to to what eBay did to retail.
Commodities are notoriously volatile. Open Mineral's trade platform for base metal commodities, which enables metals and mining companies to buy and sell digitally, uses "proprietary pricing algorithms" to estimate the value of products based on real-time market conditions in a bid to make transactions more efficient and profitable.
The platform, which also provides insights and reporting, is free to use but an account must be approved by the Open Mineral team. Once an account is approved, the person will be asked what materials they are interested in and trades are suggested based on this. Open Mineral charges a commission fee on each deal.
Cofounders Ilya Chernilovskiy and Boris Eykher, who were both working in the sector when they had the idea for the company, hope this will help companies make better business decisions and speed up trades.
Open Mineral has grown slowly since its inception, but the industry is beginning to see its value. "At first, people were cautious, I would say," Chernilovskiy told Insider. The industry has operated the same way for hundreds of years, he said, adding: "It's a very large industry, very old fashioned."
"We believe, in the 21st Century, we can use more data, more analytics, so people start to come from cautious to interested. We still have a long way to convert a very significant part of the industry."
Founded in 2017, the company has a London-based research team who publish industry news, trends, price data, and current market terms based on the trades being done on its platform.
The Series C was led by UAE sovereign wealth fund Mubadala Investment Company. Xploration Capital, which invests in digital transformation companies, industrial IT investors Emerald Technology Ventures, Statkraft, which focuses on energy disruptors, and fintech investor Lingfeng Capital also participated in the round.
The fresh cash will be used to expand its commercial team, develop the software further, and double-down on data and analytics.
Chernilovskiy "abstained" from comparing Open Mineral to "the largest companies in the industry", but said: "We have not started this business to be small."
He is, however, taking the raise as a vote of confidence. "This is a proof of the concept, proof of growth, and probably also proof of the potential of the company," Chernilovskiy said. "We are excited."
Scroll down to see the pitch deck Open Mineral used to raise the latest round.