Turning SaaS Revenue into a Fintech Platform,
+£4.8M annually
CloudCommerce - B2B E-commerce SaaS Platform.
Challenge
CloudCommerce provided e-commerce software to 3,400 UK small businesses, generating £8.2M ARR from subscription fees. However, their CEO recognized a massive opportunity: their merchants processed £420M annually through external payment providers like Stripe and PayPal — revenue flowing past them.
The board wanted to build embedded financial services (payments, lending, business accounts) to capture a share of this £420M transaction volume. But they faced critical obstacles. The CTO estimated they'd need to hire 15+ fintech specialists and 18-24 months to build this internally — time and money they couldn't afford.
Key challenges:
- No Fintech Expertise: Engineering team built SaaS applications, not regulated financial infrastructure
- Regulatory Complexity: Becoming an E-Money Institution required FCA authorisation — a 12-18 month process they couldn't navigate alone
- Integration Nightmare: Connecting to banking infrastructure, card networks, and KYC providers while maintaining their core SaaS product
- Trust & Risk: One security breach or compliance failure could destroy their core SaaS business
- Time Pressure: Competitors were launching embedded finance features — they had 9 months to launch or risk losing market position
Solution
We deployed a specialized 8-person fintech team (2 payments architects, 2 backend engineers, 1 compliance specialist, 1 security engineer, 1 integration specialist, 1 QA) working in parallel with their internal team over 14 months:
Phase 1: FCA Authorisation & Infrastructure (Months 1-8)
- Conducted FCA authorisation readiness assessment and gap analysis
- Architected compliant e-money platform with segregated client funds
- Built regulatory reporting system for FCA submissions (safeguarding, AML, transaction monitoring)
- Implemented banking integrations with Modulr and ClearBank for account infrastructure
- Developed automated KYC/KYB workflows for merchant onboarding
- Created fraud monitoring and sanctions screening systems
- Prepared and submitted FCA authorisation application (approved Month 8)
Phase 2: Payment Processing & Accounts (Months 6-12)
- Integrated Visa and Mastercard acquiring through Checkout.com and Adyen
- Built payment gateway with intelligent routing (optimizing for cost, approval rates, latency)
- Developed virtual business accounts for merchants with real-time balance views
- Created payout system enabling instant withdrawals to merchant bank accounts
- Implemented reconciliation engine matching transactions across multiple payment rails
- Built merchant dashboard showing payment analytics and cash flow insights
Phase 3: Embedded Lending & AI Credit Decisioning (Months 10-14)
- Developed alternative credit scoring using ML models analyzing transaction data, sales velocity, and customer retention
- Built automated underwriting system approving loans from £5k-£50k in under 5 minutes
- Implemented cash flow forecasting to predict merchant repayment capacity
- Created revenue-based financing product with daily automated repayments
- Developed credit risk monitoring system flagging deteriorating merchant health
- Built collections and recovery workflows for non-performing loans
Result
Business Impact:
- 💰 New revenue stream generating £4.8M annually from payment processing and lending fees
- 📈 Total revenue increased 59% (£8.2M → £13M ARR)
- 🎯 Customer lifetime value increased by 3.2x (customers using embedded finance stay 3x longer)
- 💳 Processing £85M in merchant payments annually (20% of total merchant volume captured)
- 💸 £12M in loans originated in first 12 months with 2.1% default rate
Customer Impact:
- 🚀 87% of merchants adopted embedded payments within 6 months
- ⚡ Merchant payout time reduced from 3-5 days to instant (vs. traditional providers)
- 📊 340 merchants secured working capital loans averaging £28k each
- 💼 Merchant churn reduced by 42% due to embedded finance lock-in
Platform Performance:
- ⚡ Payment approval rate: 94.3% (vs. 89% industry average)
- 🎯 Loan approval time: 4.5 minutes (vs. 5-10 days traditional lending)
- 🤖 82% of loans auto-approved by AI underwriting system
- 🔒 Zero fraud incidents in first 18 months (£85M processed)
Technologies
One short call. We will tell you honestly whether we can help, what we would do first, and what it would return. No obligation, no hard sell.
Oliver Romanov
Founder at Time2Launch