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Pondawal, a London-based B2B insurtech that assures credit unions 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, TrueSite and Expa and new investors FJ Labs and Broadhaven Ventures. Tallis Capital general partner Tom Williams will join Bondaval’s team.
When was the last time TechCrunch covered Pontavelle? It announced its seed funding in October 2021. Since then, it has expanded its reach to 31 countries in Europe and North America, and has 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 for hiring, expansion into new international markets and adding more use cases to its platform. The startup has now raised $25 million since being founded by Tom Powell and Sam Damossi in 2020.
Bondaval’s flagship product is MicroBonds, an alternative to traditional bank guarantees and trade insurance that separates the underwriting process. As surety bonds are generally reserved for large-scale transactions and contracts, their underwriting is long and expensive. Bondaval speeds up the process and makes it accessible with its proprietary credit risk decision engine, which analyzes the probability of default on a bond’s terms, and enables Bondaval to issue microfunds at scale. Customers purchase microfunds to assure credit unions that they will fulfill the terms of the agreement.
Without MicroBonds, credit unions have several options to mitigate risk. For example, they may decide not to extend credit and ask customers to pay cash up front, but both parties have less cash flow to grow their businesses. Credit unions can ask for collateral-based security, including bank guarantees, but these take three to six months to implement and customers tend to have limited liquidity. Another option is credit insurance; The downside is that insurers can cancel those policies. Underwritten by S&P A+ underwriters, MicroBonds seeks to solve all these problems by providing credit unions and their customers with a quick, non-cancelable alternative available online.
When TechCrunch first covered Bondaval, it focused on independent retailers and the supply chain. Small retailers can still benefit from microbonds because they only have to 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 institutions that need to make payments on a portfolio basis. Current clients include companies in the energy sector such as Shell, BP, Highland Fuels and TACenergy.
In a statement, Williams said, “We are fascinated by the opportunity for microbonds, which can be used in so many different ways, and the sheer scale of the opportunity is mind-boggling, as it transforms credit. We see unlimited potential for Pontaal and are excited to be a part of the journey.
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