FinTechs Race to Fix the Middle Market’s Finance Gap

Enterprise resource planning (ERP) systems are the organizing backbone of corporate finance. But their limits are showing. In many cases, companies adopt them too late — after operational complexity has already outpaced the tools in place.

April 2026 PYMNTS Intelligence data, gathered with i2c, shows where the pain is concentrated. Firms in the emerging middle market — those generating between $1 million and $50 million in revenue — sit in a structural gap. They have outgrown entry-level accounting software. Yet they are not ready for enterprise-grade treasury systems or full ERP suites.

That mismatch has real 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. Companies are left managing increasing complexity with tools that were never built for that scale.

How FinTechs Are Filling the ERP Gap With Modular Financial Tools

FinTech firms are stepping into that gap. Instead of replacing legacy systems wholesale, they are building modular, API-driven tools that plug into existing workflows and extend functionality where it is most constrained.

Recent funding rounds illustrate the trend. CoPlane, which raised $14 million, is building AI-native software that integrates with ERP systems. Its tools automate high-friction processes such as invoice exception handling and order entry. Early deployments have cut thousands of hours of manual work.

DualEntry has taken a similar approach at larger scale, raising $100 million to build an AI-native ERP platform. Its system can automate up to 90% of manual finance tasks. Features include automated accounting workflows, anomaly detection and real-time reconciliation.

Both companies reflect a broader shift toward composable financial architecture. Rather than adopting one monolithic system, firms are assembling the capabilities they need. That approach lets them fix specific bottlenecks in payments, reconciliation or reporting without committing to a full ERP overhaul.

The demand for these tools is rooted in operational strain. PYMNTS Intelligence data shows that only 43% of accelerating larger firms believe their tools match their current scale. Among more established peers, that figure is 75%.

Cash visibility is a persistent weak point. Accelerating firms face weekly or daily cash shortages at more than four times the rate of established firms. The main reason is a lack of forecasting tools and integrated systems.

Why Scaling Companies Need a Pre-ERP Financial Stack

A new category of financial infrastructure is emerging. It sits between small-business tools and enterprise systems. This “pre-ERP” stack is built on modularity, interoperability and the ability to deliver quick operational gains without a full system replacement.

Most solutions in this category share common traits. They are API-first, so they connect easily with existing accounting, payments and lending platforms. They use AI to reduce manual work in reconciliation and approvals. And they are built to scale gradually, growing with the business rather than forcing a fixed architecture from day one.

Larger players are adapting to this model, too. Visa and KNEX have partnered to embed virtual card capabilities directly into Oracle’s ERP systems. The goal is to cut manual supplier payments, improve data visibility and reduce operational risk — all within existing infrastructure.

How FinTechs Are Becoming the Operating Layer for Middle Market Finance

FinTech providers are positioning themselves as the connective tissue between legacy systems and modern financial operations. Their tools help firms run effectively before, during and after ERP adoption.

For scaling businesses, that offers a practical path forward. Instead of waiting until a full ERP deployment is justified, they can build a financial stack that solves today’s problems while leaving room for future upgrades.

For FinTechs, the opportunity is large. The emerging middle market includes many firms approaching the $50 million revenue mark. Most expect to get there within two to five years. Providers that become the operating layer for that transition are well-positioned to hold a lasting place in the financial stack.