FinTechs Race to Fix the Middle Market’s Finance Gap
Enterprise resource planning (ERP) systems act as the organizing backbone of corporate finance, yet their limits are showing. In many cases, they arrive too late in a company’s lifecycle, often after operational complexity has already outpaced the tools in place.
The April 2026 PYMNTS Intelligence data gleaned through joint efforts with i2c spotlight the pain points. Firms in the emerging middle market, defined as those generating between $1 million and $50 million in revenue, sit in a structural gap. They are too large for entry-level accounting software and fragmented payment stacks, yet are not prepared to deploy enterprise-grade treasury systems or full ERP suites.
That mismatch has measurable consequences. Among larger firms growing at more than 21% annually, ERP adoption lags even as transaction volumes, supplier relationships and credit needs expand. Growth and infrastructure are moving in opposite directions, leaving companies to manage increasing complexity with tools never designed for that scale.
FinTech’s Modular Path
FinTech firms are stepping into that gap with a different approach to modernization. Rather than replacing legacy systems wholesale, they are building modular, application programming interface (API)-driven components that integrate into existing workflows and extend functionality where it is most constrained.
Recent announcements illustrate the trend. CoPlane, which raised $14 million, is developing artificial intelligence (AI)-native software designed to integrate with ERP systems and automate high-friction processes such as invoice exception handling and order entry. Early deployments have eliminated thousands of hours of manual work, underscoring the inefficiencies embedded in existing back-office operations.
DualEntry has taken a similar path, with scale, raising $100 million to build an AI-native ERP platform capable of automating up to 90% of manual finance tasks. Its system incorporates automated accounting workflows, anomaly detection and real-time reconciliation, all designed to reduce reliance on manual processes that slow scaling firms.
The platform approach reflects a shift toward composable financial architecture, where companies assemble capabilities rather than adopt monolithic systems. The appeal lies in flexibility. Firms can address immediate bottlenecks in payments, reconciliation or reporting without committing to a full ERP overhaul.
The underlying demand for these solutions is rooted in operational strain. PYMNTS Intelligence data shows that only 43% of accelerating larger firms believe their tools match their current scale, compared to 75% of more established peers.
Cash visibility remains a persistent weakness. Accelerating firms experience weekly or daily cash shortages at more than four times the rate of established firms, largely because they lack forecasting tools and integrated systems.
The Emergence of the ‘Pre-ERP’ Stack
What is taking shape is a new category of financial infrastructure that sits between small-business tools and enterprise systems. This “pre-ERP” stack is defined by modularity, interoperability and the ability to deliver immediate operational gains without requiring wholesale system replacement.
The characteristics are consistent across providers. Solutions are API-first, allowing integration with existing accounting, payments and lending platforms. They are AI-enabled, reducing manual intervention in processes such as reconciliation and approvals. And they are designed to scale incrementally, matching the pace of business growth rather than imposing a fixed architecture.
Larger, established players are adapting to this model, too. The collaboration between Visa and KNEX to embed virtual card capabilities directly into Oracle’s ERP systems reflects an effort to modernize specific workflows without altering the broader system. The goal is to reduce manual supplier payments, improve data visibility and lower operational risk within existing infrastructure.
A New Operating Layer Takes Shape
FinTech providers are positioning themselves as the connective tissue that allows firms to operate effectively before, during and even after ERP adoption.
For scaling businesses, this approach offers a practical path forward. Instead of waiting until they can justify a full ERP deployment, they can assemble a financial stack that addresses immediate needs while preserving optionality for future system upgrades.
For FinTechs, the opportunity is substantial. The emerging middle market consists of a broad cohort of firms moving toward the $50 million threshold. Many of those firms expect to reach that level within the next two to five years. Providers that establish themselves as the operating layer for this transition phase stand to capture a durable position in the financial stack.
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