Moving FaaSt — The Finance-as-a-Service TechScape

Anna Khan
Team CRV
Published in
6 min readMay 1, 2020



Visa’s purchase of Plaid for $5.3B, Paypal’s purchase of Honey for $4B and Chime’s recent $500M round are all examples of “fintech’s” renaissance in the last 5 years. But behind all the shiny fintech value generation— there was a secondary revolution happening to the finance role within a business. This space is “fintech” too, but of a different kind. I like to call it Finance-as-a-Service — a subsector of SaaS that is proving to be equally if not more valuable in the long run.

Why Now?

In years past, the finance function within a company was a limited role. The person or team responsible was usually slated to make sure the accounting was in line and taxes were prepared for the year.

With the growth of cloud, functions that were previously manual like billing customers, managing expenses, and forecasting budget, became actions that could be productized — which led to a better experience for the user (the finance role) and the end customer (the payee, the customer, and one’s own employees.)

Growth in cloud was one big change.

The other was a quiet but uniquely powerful industry behemoth that had aggregated almost 80% market share in the United States: a company that rarely gets mentioned in the news but is one of the most powerful software monopolies in the world — Intuit. All finance functions begin with the general ledger — the accounting system of record where each company’s source of truth lies.

Over several decades, Intuit had perfected the general ledger . What started as a desktop client which dominated the SMB market for years, became a massive and deeply penetrated platform play for most accounting and finance functions within an organization.

Intuit’s larger vision was always about building out a platform that would grow from and augment its general ledger functionality — for e.g. applications like greatly benefited from being listed in the Intuit app store in its early years. But as software exponentially grew, companies knew they didn’t have to settle for mediocre point solutions. This set off a wave of innovation in the FaaS(t) space (Finance-as-a-Service Technology), which offered focused and user friendly software tools that sold to the CFO suite and beyond.

Evolution: The Story of Three Waves

Wave 1: Replacing the General Ledger

The first wave of innovation in FaaSt was an attempt to replace the general ledger. The majority of Intuit’s revenue was still coming from Quickbooks Desktop and they were struggling with their Quickbooks Cloud product, Quickbooks Online (QBO). This made others believe there was a window to build a better cloud version of what Quickbooks offered today. Lots of companies attempted to build a general ledger from scratch but found it incredibly hard. What seemed easy to replicate had actually taken years of infrastructure and product strength within Intuit.

The company that partially succeeded was Xero, and even they were unable to make much headway within the US due to Intuit’s bulletproof accountant channel in the SMB vertical. Eventually, QBO built a stronger product for SMBs in cloud and maintained their strong market share — while real competition came from the top in the enterprise segment. Netsuite and Oracle battled it out in the enterprise segment which led to Oracle’s acquisiton of Netsuite for $9.3 Billion in 2016 — and other startups fled to take over the mid-market like Intacct and others. Today, QBO still dominates the SMB and is the fastest growing channel within Intuit, most recently growing 43% in Q2, driven by strong customer growth.

Wave 2: Going Beyond the General Ledger — Unbundling Intuit

After realizing that replacing the system of record or the general ledger in the finance function was both challenging from a go2market perspective and a technical perspective — innovation moved to other peripheral functionality like expenses, invoicing, payroll, and forecasting. A bevy of strong products emerged in this category, building on top of the success of Intuit’s large community of SMBs and accountants who wanted more products to manage their day to day activities.

Wave 3: The Great Re-bundling

In the last year, a new and interesting trend has emerged. Companies that started off in bookkeeping automation are offering solutions for billing — others that started in spend management are offering payroll solutions. With strong infrastructure options and better bank integrations, new cloud entrants can build and offer multiple solutions easier than they could have a decade ago. This has led to an incredible proliferation of tools for the finance role that I’ve outlined below. All of this being said, replacing finance tools is tough. It may be easy to switch tools in other functions — but you can’t get it wrong with billing, or payroll, or bookkeeping! This leads to often slower sales cycles, and frankly, companies sticking to less friendly solutions (because hey! if its working, why break it?)

Despite this reality in Finance-as-a-Service — the continuous push and pull of fast innovation cycles, and slower switching cycles make for a fascinating market space.

The best part (and most fascinating in my opinion) is that unlike most other large companies, Intuit has been quick to react to these emerging changes. They know their customers need more advanced tools in this new world and continue to use their deep penetration in SMBs to cross-promote products. As an investor, I love this. As industry behemoths sustain competitive advantage, startups need to act more agile and use their speed and nuance to their advantage. It makes for exciting times.


The landscape below is my attempt to paint a picture of the FaaS landscape as it stands today. I hope to update this landscape yearly as new startups emerge, as do new segments. If you are a startup building in this space — email or DM me to be included on this chart.

CRV’s Finance-as-a-Service Techscape 2020

A Lot of Money to be Made

A number of sectors in SaaS get a lot of attention but FaaS seems to quietly go unnoticed. A large amount of money has been made in the space already with over $37B in M&A value and $206B in enterprise public value, and there’s a lot more greenfield opportunity for entrepreneurs to seize.

Here’s an overview of the acquisitions in the space (just of the companies included in the Landscape),

and an aggregate of the value of the public companies mentioned above:

  • Quickbooks is not a standalone public company but it is roughly 50% of Intuit’s business which is how I came up with the $35B number.
  • On excluding Workday: Workday’s business also has a heavy HR component so I offered a sum with and without Workday.

What’s Next? Where am I bullish?

Today we are in the later stages of Wave 2, and slowly entering Wave 3. While the thought of replacing Intuit is an ambitious one — the near term opportunity of building on top of their general ledger has engendered new innovation in peripheral and equally important categories.

As you can see in the landscape above — two subsectors in the application layer have seen the most proliferation in net new companies: Bookkeeping/Automation and Spend Management. While large incumbents exist in the space, new companies are taking new approaches to attract competitors.

The sectors that seem most entrenched with incumbents and have seen limited innovation in the last few years is in payroll and accounting/GL. Note, GL was where new entrants attempted to first innovate but Quickbooks was deemed too strong in the longtail of the market.

I’m particularly bullish in the forecasting/planning and billing/invoicing subsectors as more companies in both the mid market and SMB will want easier ways to transact with their customers and plan for the future. Typically these functions have been reserved for the enterprise, but I believe that will change.

At CRV, we are proud to be investors in this space already in companies like Pilot, Mercury, Wave and Ordway Labs. In my previous life at BVP, I also invested in companies like Adaptive Insights, Intacct, and ScaleFactor. I continue to be very bullish.

If you are building in these sectors — email me at I would love to hear from you.



Anna Khan
Team CRV

GP @CRV, Alum @HarvardHBS @Stanford. I like a bagel with attitude.