Today Taulia is announcing the launch of a greatly expanded trade financing offering that takes the provider significantly beyond its dynamic discounting roots into the broader world of receivables financing and payables financing. The solution, Taulia Enhanced Discounting (TED), already has at least one customer signed up to it (that we’re aware of). And no, it was not inspired by a raunchy comedy with an obnoxious stuffed teddy bear starring alongside Marky Mark.
Rather, TED builds an entirely new layer on the Taulia solution set which up until now has included supplier portal, dynamic discounting, ERP/financials integration, supplier management, and related capabilities to enable the effective uptake of early payment discounting programs. In short, TED brings Taulia closer to a broader set of trade financing offerings, including those by bank-based solutions, PrimeRevenue, OB10/Tungsten, Oxygen Finance, and others that bring either syndication capability and/or committed third-party capital into the trade financing equation (so companies do not just have to use their own balance sheets to fund programs).
TED does this by extending the trade financing components of Taulia. It’s meant to broaden the adoption pie (rather than take shares away) of a market still in its infancy from an adoption perspective that includes approved payables finance (also known as supply chain finance), factoring, card and, of course, dynamic discounting programs. Essentially, TED is designed to capture the “middle tail” of suppliers who are not part of existing supply chain finance programs (likely because they are too small) and dynamic discounting and card programs on the other end of the trade financing spectrum.
TED includes multiple solution components:
- A trade financing software/SaaS solution inclusive of e-invoicing (as required), supplier portal, integration, supplier self-service and related capabilities.
- Third-party financing (committed capital).
- Supplier enablement services and capability to drive adoption and the on-boarding of suppliers into the program.
- Supplier segmentation strategy, which includes suggesting optimal percentage rates (for potentially different groups within a supply base) to drive the uptake of early payment discounting programs as well as an analysis of a range of financial ratios based on industry specific information.
- A legal framework (more similar than not to others with related legal frameworks like PrimeRevenue) to ensure uptake and participation from a supply chain. Legal frameworks are important for numerous reasons, including the fact that suppliers may have already pledged their receivables as collateral for other loans or credit lines.
Now with TED, Taulia customers have a choice for whether or not they use their own cash or third-party cash (e.g., Taulia partnered banks/funds, company partnered banks/funds) to support early payment discounting programs. TED leverages third-party funds to enable the early payment of third parties and provides not only a terms extension (which could be part of a program), but also a share of the discount. Users do not pay Taulia for the product, but instead receive payment back based on the uptake of the financing solution in the supplier base.
We expect TED to be extremely successful for a variety of reasons, not the least of which is the early leadership role (40+ customers) that Taulia has garnered in the more targeted dynamic discounting market alone. There’s also the committed capital behind the program -- a big plus -- not to mention the "no fee" approach to it that allows companies to pay for it out of a share of the discounts received (and funded) by third-party sources of capital.
We’ll be covering TED in much more detail on Spend Matters PRO in the coming week as well as comparing and contrasting Taulia to other providers in the trade financing market.
Be sure to check back! In the meantime, also see these related Spend Matters PRO posts:
- Dynamic Discounting: Backdrop, Definitions, and Enablers
- E-Invoicing Forecast: 2014 Market Growth, Analysis, and Predictions
- E-Invoicing 2014 Forecast: Customer Recommendations and Vendor Shortlists
- Supplier Network 2014 Forecast: Customer Recommendations and Vendor Shortlists
- Supplier Network Forecast: 2014 Market Growth, Analysis, and Predictions