Vertical SaaS + embedded finance: unlocking the future for small businesses

This post kicks off a new blog series based on conversations from the Fintech Takes podcast, hosted by Alex Johnson and Pipe CEO Luke Voiles. Each episode brings together leading voices from across fintech to explore how technology is reshaping the future of financial services.

In this first installment, we look at one of the most powerful shifts underway: how vertical SaaS platforms and embedded finance are unlocking new opportunities for small businesses. From building trust to rethinking underwriting, these innovations are redefining what financial access looks like on Main Street.

The vertical SaaS advantage

Vertical SaaS platforms are transforming how small businesses access financial services. Unlike generic tools, they’re designed for the specific workflows of their users—restaurants, salons, legal practices, contractors, and beyond. That’s not just a design choice; it’s what makes embedding financial products both possible and powerful.

"The difference between serving a restaurant owner versus a lawyer is enormous. In restaurants you’re dealing with shift work, tips, and crazy cash flow cycles. In legal, it’s trust accounts and regulatory complexity. Vertical SaaS matters because generic tools can’t capture that nuance." — Alex Johnson

By meeting businesses where they already are, vertical SaaS creates natural touchpoints for financial services. The trust is built in, and the adoption rates show it.

Embedding finance into daily workflows

Small business owners don’t think in terms of “products,” they think in terms of problems. Can I make payroll this week? Can I afford the new equipment I need? Embedding finance directly into the software they use every day reframes lending and payments as just another tool for getting work done.

"If you’re a small business owner, you don’t wake up in the morning thinking, ‘I need a loan.’ You wake up thinking, ‘I need to make payroll,’ or ‘I need to buy inventory.’ Embedding finance into the software they already use makes it a tool for getting the job done, not just another financial product to figure out." — Alex 

And when those products show up contextually—right at the moment of need—they feel less like financial hurdles and more like enablers of growth.

"When you can put capital right where the small business is already working, inside their software, it doesn’t feel like borrowing. It feels like a partner helping them grow. That’s why adoption is so much higher—the trust is already there." — Luke Voiles

Expanding access with real-time data

Traditional underwriting has never worked well for small businesses. Many don’t have audited financials, and credit scores often miss the full picture. Vertical SaaS changes the equation by enabling underwriting against live cash flow and transaction data.

"Most small businesses don’t have audited financials. They don’t have a FICO score that tells the full story. But if you can underwrite based on real-time cash flow in the platform, you can get them approved in minutes. That’s how you open doors that banks just can’t." — Luke 

This approach brings more businesses into the fold, particularly immigrant-owned, micro, and solo operators who have historically been locked out of traditional finance.

Trust is everything

Embedded finance succeeds only when it respects and enhances the existing relationship between the vertical SaaS provider and its users. Trust matters. Users are more likely to adopt financial products when they come from a brand they already rely on. For example, a “Boulevard Capital” offer performs significantly better than a standalone Pipe-branded offer because users feel confident in the product and the brand behind it.

"The brand that small business owners are using is so important. They trust Boulevard already. When they see an offer from Boulevard, they know it’s been vetted. It changes how they think of it. You get double the conversion when you lead with the partner brand rather than a new, unknown capital brand." — Alex 

This alignment also ensures accountability. Vertical SaaS companies depend on long-term relationships with their users, so any embedded financial service must be designed to support, not exploit, the customer. This creates a virtuous cycle: the fintech gains adoption while the SaaS provider preserves trust.

Looking ahead: AI, automation, and the next decade

The future of vertical SaaS and embedded finance is even more exciting. AI-driven automation promises to streamline workflows further, from booking appointments to managing payments. Internal processes like KYC and underwriting are already seeing massive efficiency gains through AI, and these capabilities will increasingly be exposed to end-users in seamless, embedded ways.

Additionally, the product stack will expand beyond capital and payments to include payroll, accounts receivable automation, and credit solutions for micro-merchants who previously had no access to such tools. Over the next five to ten years, businesses that combine deep vertical knowledge with embedded financial services will redefine how small businesses operate, grow, and compete.

"Pipe is already using AI to automate our internal processes. We have KYC/KYB agents doing stuff that used to take 30 minutes, and now AI recommends the response in 30 seconds. Sales agents can call and say, 'we just need your EIN,' and an AI agent handles it. That doesn’t need a human anymore." — Luke 

Why this matters now

The opportunity in vertical SaaS plus embedded finance is more than market share—it’s mission-driven. By blending software with tailored financial products, these platforms aren’t just reducing friction; they’re giving small businesses the tools to survive, grow, and thrive.

"There are corners of this industry that are lucrative but honestly not that fun to cover. This isn’t that. The people building in vertical SaaS wake up every day trying to make small business owners’ lives better, and that comes through in every conversation." — Alex 

That’s why adoption continues to grow, retention strengthens, and this space remains one of the most compelling corners of fintech to watch over the next decade.

If you want to hear the full conversation between Alex and Luke, watch the complete Fintech Takes episode here. And stay tuned for the rest of this series, where we’ll continue unpacking the themes and insights that are defining the next decade of fintech.