Modular Financial Tech Catches Growth Wave

Middle-market businesses—generating $1 million to $50 million in revenue annually—are facing a structural challenge: their financial infrastructure hasn’t kept pace with growth.

Many firms find themselves too large for basic accounting software yet not ready for full enterprise resource planning (ERP) systems. This gap creates operational friction, with 43% of high-growth companies feeling constrained by inadequate tools compared to just 25% of slower-growing peers.

The Rise of ‘Pre-ERP’ Solutions

FinTechs are responding with modular, API-driven components that extend existing systems rather than replacing them entirely. This approach offers:

  • Flexibility: Address specific bottlenecks in payments, reporting, or reconciliation without a full overhaul
  • Scalability: Grow alongside the business instead of imposing fixed architectures
  • Interoperability: Integrate with current accounting and payment platforms seamlessly

CoPlane, which raised $14 million, is building AI-native software that automates invoice processing and order entry—eliminating thousands of manual hours in early deployments. DualEntry has secured $100 million to develop an AI-powered ERP platform automating up to 90% of finance tasks.

Addressing Key Pain Points

The demand for these solutions is driven by real operational challenges:

  • Cash visibility: Accelerating firms experience weekly or daily cash shortages at more than four times the rate of established businesses
  • Manual processes: Inefficient workflows consume valuable time and create error risk
  • Limited forecasting: Lack of integrated systems hinders proactive financial management

Even larger players are adapting, with Visa partnering with KNEX to embed virtual card capabilities directly into Oracle ERP systems.

This emerging ‘pre-ERP’ stack offers a practical path for scaling businesses to modernize their finances incrementally—meeting immediate needs while preserving flexibility for future upgrades. As these firms approach the $50 million revenue milestone, providers that establish themselves as essential infrastructure stand to capture significant long-term value.