Bondaval raises $15M Series A for its alternative to traditional bank guarantees

Bondaval is an insurtech that gives credit teams assurance that customers will fulfill their financial obligations. Some of the investors in the round include returning and new investors. Tom Williams will be joining the board.

Bondaval's seed funding was announced by TechCrunch. It has expanded to 31 countries in Europe and North America, with plans to hire more. It now has clients like Shell andBP.

Bondaval will use its new funding to hire, expand into new international markets and add more use cases for its platform. Since it was founded in 2020, the startup has raised over twenty million dollars.

Bondaval's flagship product are MicroBonds, which are an alternative to bank guarantees and trade insurance. Since surety bonds are usually reserved for large scale transactions and contracts, their underwriting is long and expensive. Bondaval is able to issue MicroBonds at scale through its proprietary credit risk decision engine, which analyzes the probability of a default over a bond's terms. MicroBonds are bought by customers to assure credit teams that they will fulfill their obligations.

Credit teams have a number of options to reduce risk. They can decide not to extend credit and ask customers to pay upfront in cash, but that means both sides have less cash on hand. Credit teams can ask for bank guarantees, but it takes about three to six months for them to be put in place. Credit insurance can be canceled by insurers, which is a downside. MicroBonds is written by S&P A+ insurers and aims to give credit teams and their customers a faster, non-cancellable alternative that is available online.

The first time Bondaval was covered, it was focused on independent retailers. Small retailers can still benefit from MicroBonds because they only have to pay an annual premium instead of posting security. New use cases for credit managers at large companies have been added by Bondaval. There are companies in the energy sector.

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 mind blowing." Bondaval has a lot of potential and we are excited to be a part of it.

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