Embed With Startups to Win Fintech
Ross Fubini, Managing Partner at XYZ Capital, on the biggest opportunities in fintech today
The real wedge in fintech infrastructure is winning the startup at the moment it needs speed, then becoming too embedded in its product and economics to rip out later. In card issuing and BaaS, that means helping a young company launch accounts, cards, or payouts in weeks instead of a year, then riding its transaction growth until the provider becomes the default choice for bigger peers that want the same playbook.
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Marqeta showed the template. It started by making card issuance programmable for fast growing fintechs like Cash App, Klarna, and Ramp, then turned a small set of breakout customers into massive scale, proving that infrastructure vendors can grow like a venture portfolio with a few outsized winners.
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The startup buyer usually chooses speed and prebuilt workflows first. BaaS platforms package sponsor bank access, compliance setup, and card rails into an off the rack system. Later, as customers add products or want tighter KYC, bank relationships, or better unit economics, they often move toward more modular processors like Lithic or fuller stack platforms.
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That creates a ladder in the market. Legacy processors like Fiserv and FIS still handle most volume, Marqeta proved modern issuing at enterprise scale, and newer players compete by giving developers faster access, more flexible building blocks, or better economics. The land grab is not just for current fintechs, but for the much larger embedded finance long tail.
Going forward, the winners are likely to be the providers that combine startup friendly onboarding with infrastructure strong enough for bank grade scale. As more software companies add cards, lending, and payouts inside their products, early design wins with small customers can compound into category leadership when those customers become the next generation of large financial platforms.