Fintech Scales Vertical SaaS | Andreessen Horowitz

Just as the internet and web browser unlocked the previous shift, the new ease of embedding payments, lending, and other financial products will allow industry-specific software platforms (Vertical SaaS) to destroy multi-market/horizontal solutions like Salesforce. Ever smaller niches will be able to sustain venture-scale software companies because... See more

- Integrated payments and lending are unlocking new business models for software companies and vastly improving the user experience.

As the ROI of SG&A spend becomes more predictable, a non-VC financial layer will emerge within Silicon Valley, similarly helping to fuel its growth. This capital layer can help partially compensate for the slowing market-based growth tailwinds. This suite of services will benefit from a tech-specific approach: real-time debt offerings based on oper... See more

While selling into the finance department has historically been a daunting task due to large incumbents in the category, we believe the next-generation of finance software has arrived. There’s a huge opportunity ahead for vendors who identify critical components of the finance workflow that have been grossly underserved by technology.

A new set of platform players are emerging that follow a similar pattern. Much as Plaid allowed consumers to make their bank transaction data available to fintechs, these new platforms are giving fintechs access to payroll, insurance, credit, and ERP data.