Avanta Ventures backs Exponential Exchange

Exponential Markets , a platform for financial innovation based in Washington, DC, raised $7.4 million in seed financing. Leading the round, which increased the total to $8.8 million, was MaC Venture Capital. Autotech Ventures and Avanta Ventures were among the other investors.

The company, founded in 2021, is pioneering new solutions to address market volatility-related financial exposure in auto. Its initial product, the Exponential Used Vehicle Index, is designed to offer a method for tracking used vehicle values. It’s the first benchmark built to serve as an underlying instrument for hedging and trading used vehicle market values – the creation of such derivatives is the next step in Exponential’s plan.

“Current risk-mitigation approaches are inefficient for both automotive fleets and lessors who want protection against market values declining more than expected, and for insurers who want to protect themselves against volatile vehicle replacement costs. Exponential’s products address both of those market needs.” – David Li, senior principal at Avanta Ventures.