The Wake-Up Call

When Justin Kaufenberg was a college student at the University of Wisconsin-Eau Claire, his father—president of a Minnesota youth hockey organization—shared a frustration that would change everything.

After 30+ years of volunteering, he'd effectively lost his nights and weekends to managing treasury duties instead of coaching kids on the ice.

Kaufenberg experienced this firsthand while working for a youth hockey club. During registration, he watched nearly $1 million leave the building in a little tin money box.

"That was kind of the wake-up call," Kaufenberg said.

He and a few friends started building software to help youth sports organizations streamline their operations. What they discovered shocked them: nearly $100 billion per year was being transacted in U.S. recreational sports alone.

Finding the Real Economic Engine

The platform started with basic tools—websites, schedules, messaging. But clubs kept pulling them deeper into the business administration challenges: registrations, payments, paperwork, chasing bad checks.

Then a Minnesota hockey club asked them to enable online payments in just a few days.

"You do what you have to do in the early days, which is you just say yes," Kaufenberg said. "Of course, we didn't have a single line of code written."

They pulled all-nighters, built the first version of player registration and payment processing, and launched on time. In the first 60 minutes, they collected over $100,000 in registration fees.

"It broke everything, but it told us that this is the future."

As they raised financing and found mentors, the business model became crystal clear. Youth sports organizations couldn't afford high software fees, but they did have significant cash flow through player registrations.

"Relatively simple math showed that our business model, the real thing that was going to be our economic engine, should actually be payments monetization—not software fees."

The platform could charge a couple thousand dollars per year for software. But it could generate many times that in revenue by processing payments effectively and generating margin per transaction.

The PayFac Decision—and Its Consequences

Casey Kipfer (future co-founder of JustiFi) joined the finance team in 2014 as payment volume grew increasingly significant—from $10,000 to over $1 million per organization.

They initially offered gateway connections, letting organizations get their own merchant accounts. But this created friction in the user experience and limited economic opportunity.

The company made the strategic decision to become a payment facilitator (PayFac), allowing them to process payments directly, control costs, and set up each sports organization on its own sub-account.

But becoming a PayFac came with consequences.

They hired multiple developers and staff to build out payment processing from scratch. The complexity expanded as they recognized opportunities to embed additional financial products—insurance, lending, background checks, team apparel—all tailored to the seasonal cash flow patterns of sports organizations.

The Result: A Fintech-First Business

Payment processing and embedded financial products became the supermajority of revenue.

"When we were selling the company and raising money, that was specifically what we were talking about," Kaufenberg said. "No longer did we have to explain why we were going to have this high cost to acquire a customer only to get a couple of thousand dollars a year from them in SaaS fees."

Instead, they could explain that customers would pay a couple thousand for SaaS fees, then become worth 5x more with payments, 2x more with background screening, 2x more with insurance, 2x more with lending.

"It's the basis on which the company became profitable. It's the basis on which the company was ultimately bought," Kaufenberg said.

SportsEngine's acquisition by NBC Sports validated a simple truth: when you solve real financial pain points for your customers, everyone wins—the organizations you serve grow stronger, and your business becomes significantly more valuable.

"[Embedded fintech] is the basis on which the company became profitable. It's the basis on which the company was ultimately bought."

What They'd Do Differently

Success doesn't mean the path was perfect.

"We basically wrote every line of code from scratch on every nook and cranny of the software platform," Kaufenberg reflected. "I don't think you have to do that today. I think you can, in most cases, partner and use best-of-breed payment and embedded finance solutions while achieving the same upside as becoming a PayFac."

Kipfer agreed: "I would maintain the same emphasis on the economics of the payments and beyond payment products, but I would build much less of it, frankly. We spent a lot of time, resources, and energy on internal tools and features that really didn't move the needle."

The lesson was clear: Focus on what makes your platform world-class in your vertical. Partner for the fintech infrastructure.

Why We Built JustiFi

Between SportsEngine and other vSaaS platforms, we spent over a decade and millions of dollars building world-class fintech monetization. We learned what works—and what's unnecessarily hard.

After several successful exits, we decided to build what we wish we had: a simple, easy-to-understand infrastructure designed to meet the complex fintech needs of platform ecosystems.

JustiFi delivers world-class payment revenue without the decade-long build. Full white-label fintech infrastructure. Complete data ownership. Toggle-on products for insurance, BNPL, and lending. All without writing every line of code from scratch.

We built the hard way so you don't have to.

Ready to skip the decade-long learning curve? Learn about how JustiFi can accelerate your fintech potential—without the millions in development costs.

Talk to our team