Why We Invested in Bondaval: Q&A with the Dawn teamDawn

We are delighted to announce that Dawn is making a significant investment into Bondaval, the leading B2B insurtech providing digitally-enabled payment default protection to some of the world’s largest businesses. We are thrilled to be supporting Bondaval’s tireless co-founders, Tom Powell (CEO) and Sam Damoussi (CRO), as the company further expands its product offering and continues to scale globally.

Sam Damoussi (CRO) & Tom Powell (CEO)

Here, the Dawn team members who led on our investment — Partner, Dan Chaplin, and Vice President, Nils Howland — explore why we invested in Bondaval. They share thoughts on the company’s much-needed disruption of insurance lines, its proven track record, stellar team, and more.

Q: Can you tell us about Bondaval and how you discovered the company?

A: Nils: Bondaval is a technology company actively transforming payment security in B2B trade. By partnering with S&P A-rated insurers, Bondaval provides a more robust and capital-efficient form of security that can be accessed, managed and issued online, instantly and reliably. The company started out with a novel application of surety bonds, and is now expanding its product suite.

We’ve been watching Bondaval for a while and were struck by the strong traction they gained with some of the largest and global enterprises. We first met with Tom last summer, and have since held extensive meetings with the entire Bondaval leadership team. After learning in depth about the business and its exciting and ambitious plans, we looked to partner with the team and help Bondaval deliver on its enormous potential.

Q: What made Bondaval stand out to you both as specialist B2B tech investors?

A: Dan: Bondaval is so impressive because its model combines innovation at the insurance product level with a technology platform that enables greater transparency and granularity in underwriting. This setup allows them to protect underwriting performance, as they expand the addressable market of risk that they can secure, and we strongly believe that this company is set to play an important role in securing the fast-growing economy of global trade.

Bondaval’s track record also stood out to us as investors. Tom and Sam launched the company in London in 2020 and Bondaval is now licensed across 31 countries, with a global team of more than 30 people spread across London, New York, and Dallas. Notably, Bondaval is already supporting credit teams at some of the world’s largest businesses, including Shell and BP. This is a feat for any start-up, and is especially impressive given the macroeconomic backdrop to Bondaval’s expansion.

We’ve already invested in a leading embedded insurance provider, Cover Genius, and are excited to be investing in another disruptor in this space. Both companies are using technology to get closer to underlying risks and provide more optimal coverage with more granular underwriting to create a win-win situation for customers and insurers alike.

Q: Why is Bondaval’s technology / proprietary tech platform exciting?

A: Nils: Bondaval’s proposition is exciting because the company is innovating both with a new financial instrument — which provides greater security for clients — and in customer delivery and experience through its proprietary technology platform.

Its software platform allows credit teams to track and manage their credit exposure against their protection limits. In practice, this means that credit managers can seamlessly and securely extend more credit, win more business and secure better financing terms. Crucially, the platform’s software also enables Bondaval to get closer to company data, allowing for real-time monitoring and risk management, which allows for greater product innovation. For example, Bondaval’s beachhead financial instrument in surety provides greater certainty and speed of payout in the event of a claim than that offered by rivals, with that offering supported by clearer insight into the risk underwritten.

Bondaval has already proven that it delivers value far beyond the financial product — an attribute that is already proving popular with major customers. With a first-mover advantage and a commitment to continuous tech and product innovation, we believe that Bondaval can lead the trade credit insurance industry into a new era of efficiency, transparency, and customer-centricity.

Q: Please tell us a bit more about the market Bondaval is addressing. How big is the opportunity here?

A: Dan: Up to 80 percent of global trade is supported by some sort of trade financing, with 15% currently protected by credit insurance products that represent €12bn in annual premiums. Additionally, Bondaval can play a significant part in the broader $38 billion annual trade finance ecosystem, which is currently seeing rising demand for financing and protection products. Companies in this ecosystem need further support given increasing levels of cross-border trade across more diverse — and potentially risky — international trade corridors.

We are confident that Bondaval’s proprietary tech and platform provides the company with a strong foundation to pursue this wider opportunity long-term. Bondaval is already replacing legacy incumbents and partnering with blue-chip clients, and the opportunity ahead is massive.

Q: A company’s team is always a key factor that VCs consider before making an investment. What impressed you about the Bondaval team?

A: Dan: The Bondaval team is extremely strong and this was definitely a factor in our investment decision.

Firstly, Tom is an extremely structured and adept operator with an articulate and clear vision for the company as CEO. Before jumping into the world of start-ups, Tom was captain of the England International Rugby Sevens, and you can see the leadership and team-building capabilities he honed as a sportsperson shining through at Bondaval.

We were also impressed by the stellar leadership team Tom and Sam have built.

Bondaval’s management team includes seasoned industry operators across both underwriting and technology, with key figures including Ewa Rose — an industry veteran who previously headed the credit business at both Ace (now Chubb) and Markel — and Jochen Duemler, former President of Euler Hermes US. Bondaval’s leadership is also first-rate on the tech side, with former Yahoo director Yoel Marson as CTO.

Managing to convince industry experts not only to back your vision, but to come on board and execute it, says a lot to us about a founder and a company’s potential. We are confident that Tom and the Bondaval team have the skills and ambition to disrupt and augment the trade credit marketplace at scale.

Q: How will the investment from Dawn help Bondaval fuel growth and achieve long-term goals?

A: Nils: Bondaval will use our investment to help grow its offering, principally by establishing Bondaval Re, a new insurance vehicle that marks a significant chapter for the scalable growth of the business.

In addition to supporting ongoing growth, Bondaval Re will allow the company to partner directly with reinsurers as well as insurers. The vehicle also aligns Bondaval’s underwriting interests even more strongly with partners through the retention of some reinsured risk, and demonstrates to the market that the company believes in the calibre of its underwriting.

Bondaval is disrupting a market that has for too long remained dominated by legacy players. This is a B2B tech company set to transform an entire sector, and we are extremely proud and excited to be supporting Tom and the team as they take on the challenge.

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26-04-2021

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