bonds, the London-based B2B insurer that provides credit groups with assurances that customers will meet their financial obligations, has raised $15 million in a Series A funding round led by Talis Capital. The round included participation from former 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 of directors.
TechCrunch last covered Bondaval when it announced seed funding in October 2021. Since then, it has expanded its reach to 31 countries in Europe and North America, and grown its team to 20 people, with plans to hire more. Its customers currently include BP and Shell.
Bondaval’s new funding will be used to recruit, expand into new international markets and add more use cases to 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 is MicroBonds, which serves as an alternative to traditional bank guarantee and commercial insurance by splitting the underwriting process. Since underwriting bonds are typically reserved for large-scale transactions and contracts, that means their underwriting is lengthy 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 for the terms of the bond and allows Bondaval to issue Micro-bonds on a large scale. Customers purchase MicroBonds to assure credit unions that they will fulfill the terms of the contract.
Without MicroBonds, credit unions have several options for minimizing risk. For example, they may decide not to extend credit and ask customers to pay cash upfront, but that means both parties have less liquidity to grow their businesses. Credit groups can claim collateral-based guarantees, including bank guarantees, but these guarantees take about three to six months to issue and also leave customers with limited liquidity. . Another option is credit insurance; The downside is that those policies can be canceled by insurance companies. Underwritten by S&P A+ insurers, MicroBonds seeks to solve all of those problems by providing credit groups and their customers with a faster, irrevocable, affordable alternative. available online.
When TechCrunch first covered Bondaval, it focused on independent retailers and supply chains. Small retailers can still benefit from MicroBonds because they simply pay an annual premium instead of posting collateral-based security, which means more liquidity. But Bondaval has expanded into new use cases for credit managers at large companies who need to secure payments on a portfolio basis. These include companies in the energy sector, such as existing customers Shell, BP, Highland Fuels and TACenergy.
In a statement, Williams said, “We are so impressed with the opportunity for Micro Bonds that can be applied in so many different ways, and the sheer size of the opportunity is astounding, so much so that credit can be converted. We see the limitless potential of Bondaval and are excited to be joining the journey.”