Neobanks Becoming Vertical ERPs
Matt Brown, Co-Founder of Bonsai, on the rise of vertical ERPs
The winning neobank play is shifting from selling a checking account to owning the operating system around the money. A plain bank account gives thin interchange revenue and requires painful behavior change, like moving payroll or daily cash management. The stronger model is to pair the account with software a business or worker already uses, like invoicing, payroll, bill pay, expense controls, or cash flow dashboards, so the bank becomes part of the job instead of a separate destination.
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Kapital shows the pattern clearly. It started with banking and credit for SMBs, then bundled expense management, bill pay, payroll, FP&A, and inventory tools. By 2023, about 40% of revenue came from SaaS and 60% from lending, which is a much broader model than interchange alone.
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HoneyBook is the mirror image from the software side. It began with proposals, contracts, payments, and client management for solopreneurs, then added checking, debit, and money tools in 2024. That is what an ERP like neobank looks like in practice, one login for both workflow and cash.
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The reason this bundle is powerful is stickiness. Payroll, contractor payouts, and bank balances sit near the most sensitive workflows in a business. Once software controls both the task and the payment, it can sell faster payouts, lending, cards, compliance, and other high margin services on top.
This is heading toward category blur, where the best fintech products look more like industry software, and the best vertical software products look more like banks. Over time, the durable winners are likely to be the companies that control both workflow and fund flows in one place, because that combination compounds retention, ARPU, and product expansion.