February 4, 2023

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Bondaval Raises $15M Series A for its Alternative to Traditional Bank Guarantees • Eureka News Now

Bondaval, the London-based B2B insurtech that provides credit teams with confidence that clients are meeting their financial obligations, has raised $15 million in Series A funding led by Talis Capital. The round included participation from returning investors Octopus Ventures, Insurtech Gateway Ltd, Truesight and Expa, as well as new investors FJ Labs and Broadhaven Ventures. Tom Williams, General Partner of Talis Capital, will join Bondaval’s Board of Directors.

Eureka News Now last reported on 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 expanded its team to 20 employees with plans to hire more. His customers now include BP and Shell.

Bondaval’s new funds will be used to hire staff, expand into new international markets and add more use cases for its platform. The startup has now raised $25 million since it was founded in 2020 by Tom Powell and Sam Damoussi.

Bondaval’s flagship product are MicroBonds, which serve as an alternative to traditional bank guarantees and trade insurance by fractionating the underwriting process. Since surety bonds are typically reserved for large transactions and contracts, this means that they are lengthy and expensive to sign. Bondaval accelerates the process and makes it more accessible through its proprietary credit risk decision engine, which analyzes the probability of default across a bond’s terms and enables Bondaval to issue MicroBonds at scale. Customers buy MicroBonds to reassure credit teams that they will meet contract terms.

Without MicroBonds, credit teams have multiple options to mitigate risk. For example, they may decide not to extend credit and ask customers to pay in cash up front, but that means both sides have less liquidity to grow their business. Credit teams can request collateral-based guarantees, including bank guarantees, but these take around three to six months to come into effect and also leave clients with limited liquidity. Another option is credit insurance; The downside is that these policies can be canceled by insurers. Underwritten by S&P A+ insurers, MicroBonds seeks to solve all of these problems by offering credit teams and their customers a faster, non-cancellable alternative available online.

When Eureka News Now first reported on Bondaval, it focused on independent retailers and the supply chain. Small retailers can still benefit from MicroBonds as they only have to pay an annual premium instead of posting collateral, which means more liquidity. But Bondaval has expanded into new use cases for credit managers in large companies who need to hedge payments on a portfolio basis. These include energy sector companies 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 applied in so many different ways, and the sheer size of the opportunity is overwhelming to the point where it could transform lending. We see limitless potential for Bondaval and are excited to be a part of the journey.”