MIT-Born Sigma Ratings Incentivizes Good Corporate Behavior
Using AI, Sigma Ratings provides new insight into non-credit risk vulnerabilities
Written by Teishun Roquerre and Jeremy Batchelder, Venture Fellows at Rough Draft Ventures
MIT-born Sigma Ratings is using advanced algorithms to generate non-credit risk ratings and dynamic predictive risk scores by collecting public and private data on emerging market entities. This first-ever ratings system benefits two separate, yet reinforcing, sides of the market. First, ratings allow global banks and corporations to manage real-time regulatory and reputational risk and to reduce compliance costs by better monitoring their business relationships in emerging markets. Second, ratings allow emerging market entities to increase their competitive edge by demonstrating that they are managing risk through proactive management practices. The net benefit is greater trust, which leads to stronger business relationships and deeper market connections.
Sigma ratings was founded by MIT Sloan Fellows, Stuart Jones, Jr. and Gabrielle Haddad. Stuart attended MIT Sloan with the goal of solving non-credit risk quantification. After spendingtime at the U.S. Department of the Treasury, he saw that non-credit risks were often more important than the traditional credit risks covered by Standard & Poor’s and Moody’s. Gabrielle came to MIT to help catalyze technology-based solutions to complex global development problems after spending time as a lawyer at a top Wall Street firm and in one of the world’s largest development finance organizations based in Switzerland. The pair met at the MIT Sloan Fellows Program where they built an advanced algorithm to approximate risk scores on banks in an emerging market. The team has worked MIT Professor Simon Johnson as well as Anantha Chandrakasan, the Dean of MIT’s School of Engineering.
In October 2017, Sigma Ratings issued its first rating on a global trade bank, which received extensive coverage. With a growing customer roster, Sigma Ratings is tackling the $120B compliance intelligence market that is growing more than 10% year-over-year.
Sigma Ratings closed a pre-seed round and will immediately focus on hiring engineering and analytic talent as well as expanding their operations to more than twenty-five countries.
We’re excited to work with Sigma Ratings as they make global business in emerging markets more transparent and accountable. Learn more about the company on their website and reach out to the founders if you are interested in interning or joining their team in Manhattan!
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