I recently spoke with David Leevan, CEO of cQuant.io, a US-based analytics platform provider, to get an update on not only the company’s recent developments, but also the trends impacting the market for risk and risk analytics.
For those that aren’t familiar with cQuant.io (cQuant), I asked David to summarize their offering, “cQuant.io is an analytics platform in the cloud. The platform provides on-demand access for energy companies and allows users to run our prebuilt models or to build their own. The system also manages the unique workflows associated with each customer’s models and processes. With our embedded workflow management capabilities, the system can provide reports and share models and/or results across the company for better collaboration from the trading floor to the c-suite. With the use of ML-driven analytics, our customers can move to real-time analytics running continuously in the background to enable better decision making. Used as a risk management platform, energy traders can expand their view from the traditional valuation window of the prompt month out to six months, to one that informs their activities for the rest of the day/balance of the week to as far out as twenty years.”
The advent of cloud computing has had a huge impact on analytics software by enabling exponentially faster computing times, which in turn has allowed developers to embed advanced technologies like AI and ML in their solutions. cQuant has clearly leveraged these technologies to good effect as, according to David, the company has seen 100% year-over-year growth for the last several years and they continue to hire as quickly as possible. Additionally, he noted they will soon open a European office.
When asked what is fueling this growth, he was quick to point to the ongoing energy transition. He indicated the company is working with renewables developers/investors (both single asset and portfolio), energy storage operators and merchants/traders. He also noted that cQuant is finding particular interest from corporate consumers that are using the platform to optimize their renewable energy procurement and management activities; and cQuant counts several of these corporates (which are also among the world’s largest in the world) as customers.
He further noted that crypto miners are taking particular interest in the platform, “As China has shut down all trading/mining of cryptocurrencies as of last year, a lot of the activity in that region has moved to North America. Crypto datacenters are huge power consumers and their location, down to the individual node on a grid, can have huge impacts on their investment decisions. Additionally, how they operate – that is, when can/should they ramp up or down their mining operation in response to market prices – will impact their ongoing profitability…we have already deployed a couple of multi-factor bitcoin optimization models to address the needs of that market.”
In terms of other market trends, he noted that implementation timeframes have shrunk dramatically – with deployments of cQuant now taking less than a week compared to multiple months or even a year for similar systems in the past. According to David, “The energy industry is not interested in monolithic solutions. They need a platform to address departmental level requirements and play to their resource’s strengths.” He noted that companies are “trying to reduce the reliance on quants that might take weeks or months, or even more, to model an asset or market…timeframes that undermine and diminish the value of the analysis. Using an analytics platform like cQuant allows the industry to move from reliance on quantitative model builders and employ more data scientists who can leverage the platform for real-time prescriptive analytics.”
David’s comments align well with the trends we’ve noted before, and which are especially salient during periods of high and volatile commodity prices such as we are seeing now. In particular, we have seen increased (and expect to see even more) spending on agile cloud-based energy and commodity software technologies, with risk analytics of all stripes, automation leveraging AI/ML (including workflow automation), and digitalization solutions leading the pack. For solutions providers like cQuant, those that check most or all these boxes, this period of market transition and unrest can only help to increase interest in their products.