Israel startup aims to help investors gauge political risk

When investors assess the risk of putting money into a stock or company, political stability is a crucial element in their decision.

Now, Israeli startup firm GeoQuant wants investors to weigh their options using software they say can measure political risk in real time.

The company said on Wednesday that it closed a seed round of $4 million in funding. The money was raised from Aleph, an early stage venture capital fund based in Tel Aviv, as well as XL Innovate, an insurtech-focused fund in Silicon Valley. Michael Eisenberg, a partner at Aleph VC, and Martha Notaras, Partner at XL Innovate, will be joining the GeoQuant board, the startup said in a statement.

The financing will be used to continue developing the company’s software product, expand coverage areas and offerings, and grow its client base, the statement said.

“We have been looking for opportunities to bring order to the political and institutional chaos affecting the world right now,” said Eisenberg. “Globalization of business and foreign direct investment is increasing while at the same time the world is becoming less stable. It is critical that businesses understand these risks and opportunities and prepare for them with real data, not punditry.”

GeoQuant fuses political science with computer science to address current inefficiencies in the field of measuring political risk for investors, executives and other business decision makers.

Its software is designed to scrape the web for large volumes of reputable data, news and social media content. This data is then enhanced by an in-house team of political scientists and regional experts, generating daily country scores and other high-frequency indicators that allow for more robust benchmarking and pricing of political risks around the world.

“By combining our expertise in political science with cutting-edge technologies, we are the first company to systematically identify, quantify and track political risks in real time,” says GeoQuant co-founder Mark Rosenberg.

The firm says that for example, GeoQuant users can more accurately predict how the Congressional investigation into US President Donald Trump will influence long-term prospects for the US stock market. Or how China’s strategy in the South China Sea may affect global oil prices. Or even how Brazil’s ongoing governance crisis could impede growth in its retail and consumer sectors.

GeoQuant’s analytic tool kit will soon be made available to investment funds, financial institutions, corporations and other global organizations.

Its Political Risk Scores and data streams for G20 countries are now available on the Bloomberg Terminal, the company said.

The Tel Aviv-based firm, whose team consists of data science, machine learning and database architecture experts, was co-founded by Rosenberg, a Berkeley-trained political scientist and former director of Eurasia Group, and Dor Kelman, a computer engineer who was previously lead engineer at Crossrider PLC.