Insurtech start-up Nimbla has joined Starling Bank's in-app marketplace, giving it a chance to offer invoice insurance to small business customers
London-based insurtech company Nimbla has partnered with challenger bank Starling to expand the reach of its invoice insurance cover to small and medium sized enterprises (SMEs), protecting business customers from late or non-existent payments.
The deal will give Nimbla access to 65,000 SME customers through the bank’s in-app marketplace, where account holders can choose to engage with services from third-party partners that include small-change investment platform creator Moneybox and money management software firm Yolt.
Signing up for an account with Nimbla is free for businesses and gives them access to a tool that allows them to check the credit risk of new partners before working with them.
CEO Flemming Bengtsen said: “Starling is making fantastic strides in the world of business banking and we are very excited to become part of their marketplace.
“Hard-working SMEs deserve access to affordable, fast and flexible protection that will help them expand into new and existing markets, secure invoice funding and safeguard against insolvent customers.”
For Starling Bank, adding Nimbla to its list of marketplace partners is part of growing its value to customers — allowing it to differentiate from competitors.
Founder and CEO Anne Boden said: “We are building a new kind of business bank which goes the extra mile for customers and our marketplace partners are an essential ingredient to this.
“Just like Starling, Nimbla is a great example of a business that is disrupting an old industry model to create products that are relevant to the way we do business today.
“Nimbla is an excellent addition to our marketplace that I’m proud to welcome into the fold.”
Invoice insurance to protect SMEs from debt
Invoice insurance covers a business if it doesn’t receive payment for its work with a client on time, or at all, whether this is due to negligence, financial hardship or insolvency.
According to Nimbla, the UK’s 5.7 million SMEs are under threat from an increasing number of bankruptcies, with 17,454 companies failing in 2018.
The start-up claimed these SMEs are owed billions at any given time in late payments alone.
To show the damage a bankruptcy can do to a business if it’s not covered, it gave the example of a small London-based client and fashion accessory designer.
The client found itself facing a loss of more than £30,000 ($36,750) when luxury high street brand LK Bennett collapsed earlier this year, but Nimbla claimed because its invoice was insured through the start-up, it was able to recoup 90% of the money owed — minimising its loss to £3,000 ($3,675).
Nimbla customers can cover single or multiple invoices.
The deal with Starling Bank is Nimbla’s second attempt to expand its reach through partnership, with the start-up joining forces with accountancy software firm FreeAgent in January this year.
FreeAgent’s platform allows users to link it with a Nimbla account and assess the financial risk of a business with the start-ups credit-checking tool, and if necessary purchase insurance for the invoice.