Hi everyone,

I’ve worked in fintech for the past 12 years, and for the last 4 of them as an early-stage fintech investor. I’m still learning every day as GP of The Fintech Fund, and – excitingly – the fintech space continues to grow and evolve in surprising ways.

One of my goals is to share my own learnings along the way for the benefit of TWIF readers. I’m sure that not all of these fintech insights will be novel or groundbreaking, but they’ve been meaningful to me, and I hope you’ll find them interesting.

This will be an irregular series to break down thoughts and lessons from my experience as an early-stage fintech investor and operator, as well as reflections for founders and other investors. As always, I welcome any pushback and feedback!

Today’s brief reflection is on revenue scalability.

Companies covered here include SaaS fintechs like Themis, Easy Expense, Opareta, GuruHotel, and Payable, API aggregators like Stitch, TrueBiz, Zenpli and Fragment, transaction facilitators like Paytrix, Ansa, and Rainforest, banking providers like Griffin, Octo, Vault, Archa, and OutGo, and lenders like Ampla, Yave, and Flychain.

One of my least popular opinions with the fintech crowd – and a controversial one for a fintech investor – is that ‘fintech’ is not a real product category.

The term fintech describes a horizontal collection of somewhat-related products, covering anything from e-commerce logistics, to proof of identity tools, to subscription payments, to core banking software, to consumer microloans in emerging markets.

It’s almost impossible to build a comprehensive fintech market map (though I’d love to see someone try). CB Insights publishes their wide-reaching Fintech 250 every year, and even that leaves out entire swathes of the industry, by necessity:

The reason I bring this up is because not all fintech business models are comparable.

Something I focus on when investing is the scalability of revenue. The question I like to ask is, “once the product is built, how easy, cheap, and lucrative is it to acquire a new customer?” How much does it cost to earn $1 more?