Using actuarial analytics, Pramartha predicts expected future performance of companies
Analytics platform Pramartha uses actuarial sciences to tell clients their expected performance in by taking into account macro data of the economy, and combining it with global business data and the capital invested by the company.
At a glance:
Founder: Mahidhara Davanagere
Based out of: Bengaluru
Revenues: Rs 25 crore
Funding: Self-funded, Rs 25 lakh
What they solve: Offer actuarial science tool to help companies figure out the risk involved in investing in a market.
Thirty-six-year-old Mahidhara Davanagere is not your average entrepreneur. He travels across Europe and Africa helping commodity companies figure their future cash flows.
While companies go to a CFO or a Chartered Accountant for such things, Mahidhara uses an actuarial approach to accounting.
His startup, Pramartha, is an analytics platform that uses actuarial sciences to tell clients their expected performance in the future by taking into account macro data of the economy, and combining it with global business data and the capital invested, by the company in the market.
Pramartha is a platform that works on actuarial applications, enterprise risk management, quantitative techniques, and analytics. “We have developed in-house tools and techniques to access a company's risks across sectors and geographies. With our in-depth expertise in formulating cutting-edge strategies we convert business risk into opportunity through our platform,” says Mahidhara.
So if you are a company wanting to expand globally, the Pramartha platform will be helpful to you. It allows a company put in all its financials, and Pramartha’s database of historic prices and geographic risks helps the company understand the risks of investment way better than conventional accounting predictions.
The company came into being in 2014, but before that Pramartha had its beginnings in an edtech startup and from consulting experience.
Mahidhara is an actuary by profession who completed his schooling in Bengaluru and his pursued a BSc from National College, Jayanagar. Mahidhara took Pure Science and Mathematics as his core combination and completed MSc in Mathematics and an MBA from Christ University.
After working for Citi Financials as a loan officer, Mahidhara stumbled upon Actuarial Science which interested him because of the mathematical foundation. Becoming an actuary meant applying his mathematical skills in solving real world business problems. He pursued Actuarial Studies along with his job in an Australian startup - Indian Ocean Rim Asset Management (IORAM) as an Equity Analyst.
Along with an opportunity to study actuarial science, the startup provided him with a lot of exposure. It was later sold to a South African Company, Sanlam.
“It was while in IORAM that I understood the scope of Actuarial Science beyond the insurance sector that is in investments, risk management, and other fields. Having worked in a startup and seeing the growth of a small firm within three years, I was inspired to start up on my own,” says Mahidhara. He, however, began as an edtech entrepreneur.
The early days
While working in the Australian startup, Mahidhara also realised he could teach analytics and statistics to students. He began teaching full time and honed his actuarial skills on the side by consulting with small export houses in Bengaluru.
In 2014, he had enough savings and experience to build an actuarial platform. He invested Rs 25 lakh and began to build a platform based on global risk factors. He put numbers to geo-political and economy risks.
Eventually, the platform had so much data that it could tell clients whether on existing cash and bets on a product the returns would be rich or poor. He is reluctant to disclose his client list as the company works with mining companies and companies that make big bets. His boutique advisory and actuarial tech platform currently generates Rs 25 crore in revenue with 50 clients paying to use the services.
Pramartha’s business model focuses on the mathematical and actuarial outlook in every aspect of solving client problems.
It is based on buying the platform for an annual cost and fee including the consulting fee. The company provides services across a broad spectrum from mathematical and analytical services to corporates and research houses, culminating it with the actuarial advisory for investors and venture capitalists.
In short, Pramartha is an actuarial risk consulting firm with strong expertise in mathematics and quantitative skills for solving business and client problems in every sector. It has two main business offerings on the platform.
Capital Raising and Advisory which primarily focuses on advising venture capitalists and angel investors in startup financing and exit strategies through actuarial risk modelling techniques.
Data Science and Actuarial Analytics focuses on providing research and analytical services through advanced statistical tools and actuarial techniques to various sectors like health care, education, investment.
The data science and actuarial analytics team has clients like Infosys, Intel, Government of India, NTT Data in India, Calibre Financial Technology in Australia. The capital raising and advisory division has various distinguished Venture Capitalists and angel investors in its portfolio, which is investing in startups in global markets.
“The future growth strategy has been to grow the two business divisions across various geographies. Today the firm has strong fundamentals to raise capital due to its strong network of venture capitalists. However capital infusion would be done only on a need basis and in the long run the two divisions will be spun off as separate entities. The company competes with MuSigma and Fractal, which are multi-million dollar businesses and are legacy analytics companies. “The challenge is to scale the product globally and to sign long term contracts,” says Chetan Anand, Director at PWC.
Bond traders may be ruling the world, but it is the actuarial scientist who makes them millionaires and billionaires.