Bondaval, the London-based B2B insurance company that gives credit teams confidence that customers will meet their financial obligations, has raised $15 million in Series A funding led by Talis Capital. The round includes participation from returning investors Octopus Ventures, Insurtech Gateway Ltd, Truesight and Expa and new investors FJ Labs and Broadhaven Ventures. Talis Capital General Partner Tom Williams will join Bondaval’s board.
TechCrunch last covered Bondaval when it announced its seed funding in October 2021. It has since expanded its reach to 31 countries in Europe and North America and grown its team to 20 people, with plans to hire more. Its clients now include BP and Shell.
Bondaval’s new funding will be used to hire, expand into new international markets and add more use cases for its platform. The startup has already raised $25 million since it was founded in 2020 by Tom Powell and Sam Damoussi.
Bondaval’s flagship product is MicroBonds, which serve as an alternative to traditional bank guarantees and commercial insurance by fractionalizing the underwriting process. Because surety bonds are usually reserved for large-scale deals and contracts, this means that underwriting them is time-consuming and expensive. Bondaval speeds up the process and makes it more accessible through its proprietary credit risk decision engine, which analyzes the probability of default against the terms of the bond and enables Bondaval to issue MicroBonds at scale. Customers buy MicroBonds to guarantee loan teams that they will meet the terms of the contract.
Without MicroBonds, credit teams have few options to mitigate risk. For example, they may decide not to extend credit and ask customers to pay cash up front, but this means that both parties have less liquidity to grow their business. Credit teams can request collateral-based collateral, including bank guarantees, but these take around three to six months to put in place and also leave customers with limited liquidity. Another option is credit insurance; the downside there is that these policies can be canceled by the insurers. Underwritten by S&P A+ underwriters, MicroBonds seeks to solve all of these problems by providing credit teams and their customers with a faster, non-cancelable alternative that is available online.
When TechCrunch first covered Bondaval, it was focused on independent retailers and the supply chain. Small retailers can still benefit from MicroBonds because they only have to pay an annual premium, rather than providing collateral-based collateral, which means more liquidity. But Bondaval has expanded into new use cases for credit managers at large companies who need to secure portfolio-based payments. These include companies in the energy sector such as current clients Shell, BP, Highland Fuels and TACenergy.
In a statement, Williams said: “We are impressed by the opportunity for MicroBonds, which can be implemented in so many different ways, and the sheer scale of the opportunity is mind-boggling in the extent to which it can transform credit. We see unlimited potential for Bondaval and are delighted to be part of the journey.”