London-based B2B insurtech Bondaval, which provides credit teams with the confidence that consumers will pay their bills, has secured $15 million in Series A funding led by Talis Capital. New investors FJ Labs and Broadhaven Ventures joined existing investors Octopus Ventures, Insurtech Gateway Ltd., Truesight, and Expa in this round. Bondaval has appointed Tom Williams, general partner at Talis Capital, to its board of directors. The newly acquired capital will be put toward growing Bondaval's team, entering new foreign markets, and developing new applications for the platform. Ever since its founding in 2020 by Tom Powell and Sam Damoussi, the firm has amassed a total of $25 million in funding. MicroBonds, Bondaval's flagship product, is a kind of fractional underwriting that may replace conventional bank guarantees and trade insurance. Surety bonds are lengthy and costly to underwrite since they are typically used for very large transactions or contracts. Bondaval's patented credit risk decision engine calculates the likelihood of a bond's default over its tenure, allowing
Bondaval to issue MicroBonds at scale while simultaneously speeding up the process and making it more accessible. Microbonds are bought by customers as a guarantee to credit teams that they will perform under the terms of a contract. Credit departments have several tools at their disposal besides microbonds to use to reduce risk. They might, for instance, forego offering credit and instead demand immediate payment in cash, but this would limit both parties' ability to expand their operations. Collateral-based security requests from credit teams, such as bank guarantees, take three to six months to implement and leave clients with little cash. As an alternative, credit insurance is available; however, insurers reserve the right to revoke coverage at any time. MicroBonds, which are underwritten by S&P A+ insurers, aims to address these issues by providing credit teams and their clients with a more efficient, non-cancellable, and easily accessible online bond option.
Even if microbonds aren't a good fit for large corporations, small businesses can nevertheless profit from them by paying an annual premium instead of providing collateral-based security. However, Bondaval has branched out into new use cases for credit managers at major corporations that need to secure payments on a portfolio basis. Companies in the energy industry, such as Shell, BP, Highland Fuels, and TACenergy, are examples of such patrons. Williams added, "We are fascinated by the possibilities for microbonds, which can be deployed in so many various ways, and the sheer enormity of the opportunity is mind-blowing, to the point that it may alter credit. We are pleased to be a part of Bondaval's promising future.
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