- Arbol Market is a young startup run by Sid Jha, a former quant for Ken Griffin's Citadel, that lets farmers and others impacted by climate change protect their profits.
- The firm considers itself an insure-tech firm — though it is in the process of becoming an insurer — because it uses smart contracts on a blockchain platform to connect those who need climate change insurance and pools of capital looking to diversify their holdings.
- So far, the platform has $250 million of risk capacity currently, with plans to break $1 billion early this year.
- "When we looked at this landscape, we saw users that could use this product and weren't being served," said Jha, who is a cofounder with his brother.
- Visit Business Insider's homepage for more stories.
Blockchain. Machine learning. Alternative data. Climate change.
It seems like Arbol Market, a new insure-tech platform, is hitting every buzzword, and the startup's quick growth is proving there's a market for its products.
Arbol was founded by Sid Jha, a former quant at Ken Griffin's Citadel who brought a machine-learning approach to trading commodities, and his brother Osho Jha, the firm's chief data scientist who has worked at data shops like M Science and asset managers like BlackRock and J. Goldman & Co. The start-up began in 2019, after Sid and Osho left Citadel and J. Goldman & Co., respectively.
The platform operates in a pretty straightforward way: It connects people and businesses, like farmers and cruise ship operators, most at risk of climate change hurting their bottom lines with investors like hedge funds and reinsurers willing to offer protection. Unlike most insurers here is no back-and-forth between the two parties, and Arbol never handles the money. Arbol is not technically an insurer yet, though it is in the process of becoming one so it can develop more products and expand to more jurisdictions.
See more: Billionaire Ken Griffin's Citadel has a sprawling alumni network of more than 80 hedge funds. Take a look at our exclusive list.
Instead, policies are triggered if certain weather events — say not enough rain falls in a season to grow a certain crop — occur. Arbol uses smart contracts, or self-executing contracts, on blockchain technology, which cut out the middleman and automatically pays out money to the insured once a specified event occurs.
For Sid Jha, the utility of this platform is obvious, and solves a big problem.