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London-based insurtech BondAval picks $7M seed round led by Octopus Ventures

BondAval, the insurtech startup offering a new form of payment security, has recently announced that it has secured a $7 million seed round led by UK-based venture fund Octopus Ventures.

The company, which has offices in London and Austin, also received co-investment from US-based fund Expa, along with support from existing investors Insurtech Gateway and TrueSight Ventures and several high-profile entrepreneurs, including Tom Blomfield (Monzo and GoCardless), Charlie Delingpole (ComplyAdvantage) and Matt Clifford (Entrepreneur First).

Founded in 2020, BondAval addresses the imbalance of working capital solutions in supply chains between large corporates and smaller businesses. Currently, SMBs are forced to use sub-optimal instruments, which come with a high time, money, and opportunity cost.

Co-founders Tom Powell and Sam Damoussi identified that offering businesses of any size access to highly efficient and affordable investment-grade payment security in real-time has far-reaching positive impacts on supply chains.

As an alternative to existing solutions, BondAval’s next-generation payment security – MicroBonds™️ – is backed by a panel of A-rated insurers. By guaranteeing payments and supply contracts with investment-grade certainty, these revolutionary MicroBonds empower businesses of any size to realise their full potential.

BondAval is currently live in both the UK and the US, with North American operations being led by Charlie Evans, formerly of venture capital firm, Hedosophia.

The company plans to use the funds primarily for growth, hiring out larger teams in the UK, US and new markets as it expands, as well as continuing the build-out and scale of its proprietary platform and provisioning services.

Tom Powell, CEO and Co-Founder of BondAval, said: “We envision a world where the size of a business is no longer an inhibitor to it achieving its ultimate goals. We’re building the infrastructure to give businesses of any shape and size access to the most efficient forms of capital in real time. This funding round is yet another great point of validation for BondAval. The interest and support of all our investors – funds and angels alike – is rewarding in the fact that they all see the opportunity ahead of us. The capital raised will help us to continue hiring the best talent available. I’m proud of what this team has accomplished already and excited for the future.”

Sam Damoussi, COO and Co-Founder of BondAval added: “BondAval is bringing a completely novel outlook to a space that has been crying out for innovation. MicroBonds are a revolutionary security instrument with clear benefits for both suppliers and merchants. They are also highly flexible. We are constantly validating new and innovative use cases, and this fundraise will provide us with the capacity to further roll out our product offering.”

Tosin Agbabiaka, fintech investor at Octopus Ventures, who will join the BondAval board said: “For decades, companies looking to guarantee future transactions were forced to stomach high costs, significant collateral requirements, and a slow, analogue process. BondAval’s technology changes that, applying surety to micro B2B transactions to transform the cost structure of the product. This means that SMBs and industries across the world can now access collateral free, near-instant guarantees, and a significantly lower cost of working capital, all through a friction free user experience. The team’s depth of expertise here is remarkable, particularly for a business at this stage, and their execution to date has been outstanding. We are excited to support them in carving out a new market. The opportunity here is truly enormous.”

Co-founder Tom Powell’s, career prior to founding BondAval was non-traditional. Tom traded international rugby, having captained the England Sevens team, for financial services, and subsequently the technology sector. Co-founder, Sam Damoussi, spent more than a decade working in the insurance-backed surety market and brings with him a deep domain expertise, as well as a strong track record in insurance product innovation across international markets. This unique combination of experiences allows them to bring a novel, refreshing approach to a largely static and antiquated B2B insurance industry.

Dave Clarke, London-based partner at Expa added: “At Expa we’ve seen what founders can achieve with technology in industries where they have deep expertise and first-hand experience. We are excited about the opportunities associated with supply chains for BondAval in North America and around the world and look forward to working with the team to scale.”