He raised $275M in the last 3 years. His 'boring' B2B startup is now a $1B unicorn. | Andrew Butt, Founder of Enable

A UK services shop became a unicorn by managing rebates

Enable turned a UK custom software shop into an enterprise rebate management platform. Companies tracked rebates, a large part of their profit, in spreadsheets, so one product could serve distributors, buying groups and manufacturers. The path took years of thin cash and a move to Silicon Valley, where investors backed it for its network effect.

Takeaways

• Rebates were managed in mismatched spreadsheets. A rebate is money flowing back through the supply chain, much like sales commissions that drive behaviour. Terms sat in Excel and Word files that often did not match. Enable audits have found missing rebate money, from hundreds of thousands to millions for one customer.
• Services income funded a slow road to product. From about 2001 Enable's company built custom software for clients. Repeated requests for rebate software showed the need by 2010, and a 2013 Silicon Valley study tour convinced Butt to build a product. Code began around 2014 and the product launched in 2016.
• Customer requests shaped the product through lean years. The first product stored rebate agreements. Forecasting, cash collection and approval workflow came as customers asked. Growth was slow, with about $2.5m of ARR by late 2019. Cash was so tight that Butt once could not make payroll without a collected check.
• Investors backed the network effect, not the category. Investors did not understand rebates but liked the network effect, and later rounds were preempted. Enable has raised nearly $300m, far beyond the $10m Butt hoped would last. Investors questioned whether months-long implementations could scale.
• Product market fit came from repeatability. It arrived when a dozen unrelated customers ran on one code base and renewed. Revenue leader Jerry Brooner then lifted signings to 25 to 30 per quarter. A shared portal, proposed by cofounder David, now links tens of thousands of trading partners.
• Butt would have shut services sooner. Closing services meant moving from a somewhat profitable business to an immediate loss, so Enable waited for the Series A. With hindsight Butt would have shut it a couple of years earlier.
• Founders should start with one use case. Butt says most founders, himself included, go too broad by building too much and doing too many things. He advises proving one impactful use case before building widely and raising money, and he still questions himself on it.

Road to the Series A

1. A Vistage peer group member advised Butt in 2018 to move to California.
2. The round began at $12m in February 2020.
3. Butt was virtually on a tourist visa, knocking on doors with a couple of team members.