eCommerce platform hires EDC to evaluate transformational embedded finance opportunity

eCommerce platform hires EDC to evaluate transformational embedded finance opportunity

EDC Team
November 24, 2022

The challenge

Our client provides SMEs with an industry-leading end-to-end eCommerce platform and solutions, including initial site development and ongoing support, alongside wrap around digital marketing services. The offering is delivered under a unique shared success model, which empowers retailers by removing upfront build costs and ensuring complete alignment between our client and its over 1,000 customers as they grow. Ther platform delivered over a billion pounds of client revenue in the last year.

The client sought EDC assistance to evaluate a potentially transformational growth opportunity. They had been approached by a third-party payment provider with the opportunity to white label their payment gateway and partner on a revenue share basis. There were several flavours of white labelling being discussed, and the long-term trajectory was understood to be towards ‘embedded finance’ including distributing additional financial services directly via the clients platform. On the face of it, the opportunity appeared to be potentially transformational for the business. Parallels were being made with ecommerce platforms such as Shopify which had successfully launched a similar payments business resulting int transformational growth and value creation.

How EDC helped

The client was referred to EDC and requested our support to perform an independent evaluate and assessment of the opportunity, and provide further guidance on GTM, implementation and strategy execution.

The key question the client wanted to address was: what was the maximum value opportunity available to them from payments and fintech. They were keen to take a broad view of value in terms of monetisation but also customer experience and product differentiation.

The client had several associated questions that it asked EDC to address including what would it take to deliver the vision based on today’s set-up, and how long will it take?

The client also wanted to better understand the risk exposure that they might face as the payment volumes grew.

We took several steps to assess the opportunity. First, we reviewed all operating model variations on the table, and defined and developed a GTM strategy and roadmap towards an end state for the most viable and commercially attractive option. Second, we developed a comprehensive opportunity sizing model to fully quantify the addressable revenue buckets along each step of the GTM strategic roadmap.

Thirdly, to kick start the strategy implementation and execution, we identified and engaged with various other potential partners, and provided an independent and expert view and comparison with deal on the table from the original partner. This was both a commercial orientated comparison in terms of pricing, unit economics and ROI, but also a evaluation based on capabilities and best overall fit.

Finally, we defined what additional capabilities the client would need to develop and advised on building an internal team and identified key FTE that would need to be brought into the business based on a required skills and experience profile.

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