According to a recent article in Tech Crunch:

“Investors have decided that consumer fintech businesses are not SaaS companies, meaning fintech revenues should not be valued as if they were annual recurring revenue (ARR). The point matters because a host of consumer fintech startups have raised capital, spent and been valued in recent years as if they are SaaS companies. This may have been an error.”

The article points to the recent devaluations of Robinhood and Coinbase as proof points. Don’t throw the baby out with the bath water, however. The annual recurring revenue (ARR) on fintech subscriptions is alive and well.

The fintech subscription model

Across a range of financial management activities, more consumers use fintech providers than use traditional banks and credit unions. And a little more than 10% of consumers pay fintechs to receive or access the service.

Fintechs fees are often positioned as a subscription charge. Acorns, for example, says “rather than surprise fees, we bundle our products into simple, transparent subscription tiers that support your financial wellness.”

Dave (a fintech, not the name of some random guy) charges a monthly “membership” fee to access the company’s account monitoring and notification services, budgeting feature, and to maintain an active connection to members’ external bank accounts through third-party services .