Our Investment in Rebate Management Software – Enable Maximizes the Performance of B2B Deals While Improving Financial Transparency and Operational Efficiency
By Brent MacDonald – Principal @ Rising Tide VC
Enable was born out of DCS Group, the largest distributor of health, beauty, and household products in the UK. DCS wanted a smart, efficient way to manage its many complex trading agreements with suppliers and customers. But it could not find a single solution that met all its needs. So, DCS formed its own software team, and spun it off into a new limited company called “Enable”. The Company launched their first rebate management product in 2016, and since has been growing their client base and product portfolio.
Rebates were once a “bonus” revenue opportunity for distributors, however in recent times rebates from manufacturers have become the majority of a distributor’s revenue. Rebates are now more than 100 percent of the profit for distributors across many verticals. By “rebate”, it means that the distributor purchases the manufacturers goods and must re-sell it at a pre-set number, for example, and if they hit this threshold they qualify for a “rebate”, or deal, which then becomes their revenue source. For distributors managing many different manufacturers, the complexity of understanding what rebates they qualify for, and from whom, and managing their process, accordingly, has become hugely complicated. The market for rebates is significant, with more than $1 trillion in rebates issued every year (Enable). However, we believe B2B trading is broken: four of five companies have no system, each part misinterprets, there is missing sales out data, no shared visibility of accruals; it’s error prone, and time consuming.
Enable uses digital technology to streamline the process and to help suppliers and distributors work together more efficiently. The Enable platform helps with tracking and managing rebates, as well as optimizing them. The platform becomes the system of record for all B2B deals, and the calculator of granular deal earnings. It tracks data that includes the day, supplier, product, source, customer identity and sale details, all in one place. More commonly said “DealTrack” is a software solution that helps organizations manage complex trading agreements involving retrospective payments, such as rebates, retrospective discounts, royalties, purchase income and back margin.
Over the past two years, Enable customers have set up thousands of B2B rebate deals on over $30 Billion of sales and purchases, and have invited more than 2,000 of their trading partners to its platform to review and collaborate on those deals. Customers include distributors, buying groups and retailers from across US, Canada and Europe.
Why We Are Excited:
Rising Tide sees digitization of supply chain as an area of under-investment and representing a huge growth opportunity. Rebates have become an increasingly popular way to boost profits. Enable’s collaborative SaaS approach takes friction out of B2B relationships and gets trading partners focused on one important goal: helping suppliers, distributors and wholesalers drive mutually profitable growth, while improving cash flow and reducing risk. The Company is gaining traction in the marketplace and the pandemic has proven that their customers see Enable as an essential provider, with high customer engagement and renewals during the period.
Disclaimer: The portfolio companies described herein do not represent all the portfolio companies purchased, sold or recommended for portfolios advised by Rising Tide. The reader should not assume that an investment in the portfolio companies identified were or will be profitable. Past performance is not indicative of future results. Investors should be aware that a loss of investment is possible.