Embedded Finance

Definition

Embedded finance refers to the integration of financial services — payments processing, lending, insurance, banking — directly into non-financial software platforms. Rather than using a separate financial provider, end-users transact within the software they already use. For vertical software companies, embedded finance represents a significant revenue expansion opportunity beyond core SaaS subscriptions.

Context

In Ep. 20, Jake Colognesi identifies embedded finance as both a Mamba Growth investment thesis and a sourcing lever. Many of Mamba's target companies — vertical software system-of-record platforms — have the opportunity to "embed and monetize payments, embed and monetize lending products." Jake notes that payments in particular is "exceedingly opaque" and that most founders don't know whether their current Stripe deal is competitive. Mamba plans to use payments benchmarking as a data snack — bringing transparency to founders as part of value-first outreach.

Related Terms

• Vertical Software — the platform type that enables embedded finance
• SaaS — embedded finance adds revenue on top of SaaS subscriptions
• Data Snacks — embedded payments benchmarking as a value-add tactic