# Method Financial Financial Model Embedded API enabling any fintech/app to initiate debt repayments across 95%+ of US consumer lenders - Canonical: https://finamodel.com/startups/method-financial - Excel download: https://finamodel.com/startup-models/method-financial.xlsx - Category: Fintech - Model type: SaaS ARR / Valuation - Funding round: Pre-seed - Funding: $2.5M - Founded: 2022 - Geography: United States - Customer: B2B2C ## About the company Method Financial provides an embedded API that lets fintechs and applications initiate debt repayments across most US consumer lenders. It gives product teams a way to embed a difficult payment action without building lender connections individually. The research points to a $0.65 price per repayment and recurring MRR, suggesting a usage-based infrastructure product with possible monthly minimums or volume commitments. Its customers are developers and financial-services companies rather than end consumers. The model should forecast customer integrations, live users, repayments per user, transaction price, and tiered pricing or minimum commitments. Implementation conversion, customer retention, API-operating cost, and expansion in repayment volume determine the economics of the platform. ## What's included - 5-year monthly revenue build with stage-appropriate growth assumptions - Full P&L, headcount plan, and operating-expense schedule - Cash-flow statement, runway, and burn-rate tracking - Valuation via exit multiple with a DCF cross-check - Returns analysis with MOIC and IRR - Unit economics including CAC, LTV, payback, and cohort retention ## Product & value proposition Method Financial is an embedded debt repayment API ("rails") that lets developer teams integrate debt payoff flows without building custom lender integrations. Key product claims: - 95% of US lenders supported [slide 5] - No credentials required from end-user; real-time account verification with lender [slide 6] - Persistent payment access without re-authentication [slide 6] - Embeddable UI components included (secure, compliant) [slide 5] - Start moving money with just an API key [slide 5] - Covers debt types: credit cards, student loans, mortgages, auto, and other consumer debt [slide 6] Use cases surfaced in deck [slide 7]: 1. Debt repayment - initiate payments to any consumer debt 2. Mortgage underwriting - tradeline paydown with instant verification at closing 3. Balance transfers - transfer balances from existing credit lines Problem they solve [slide 3]: 10,000+ lenders in the US; existing integrations rely on brittle/manual processes (mailing checks); incumbents are costly and insecure; integration timelines up to 6 months; no developer-friendly standard. ## Market - TAM: $6.5B, calculated as: - $0.65 per debt repayment - × 10 billion debt repayments per year (US) ## Revenue model - Implied transaction-fee model: $0.65 per debt repayment - this is the stated price-per-transaction used to size the market, and is the most likely unit revenue figure - Confirmed revenue metric in deck is MRR (Monthly Recurring Revenue), suggesting recurring billing rather than pure spot-transaction fees - possibly per-API-call or per-transaction billed monthly - Channels: direct developer/B2B sales; fintech apps embed the API - No explicit pricing page, tier structure, or contract terms disclosed in deck ## Traction & metrics - Launched: May - Live customers: 4 - LOIs: 6, valued at $250K MRR - Revenue: "$x MRR" - actual figure intentionally redacted/blurred in deck - Product Hunt: #3 Product of the Day - Note: Customer logos on slide 8 are blurred/redacted; cannot read names from image ## Competition / moat - Incumbent framing: existing solutions described as "costly, unsecure, non-developer-friendly, 6-month integration timelines" - Moat: lender network breadth (95% coverage), no-credential linking, instant verification, persistent access - i.e. network/integration depth - Comparable infrastructure: Plaid (read-access), Dwolla, Finix - not mentioned but implied by "incumbents are costly" framing ## Team & funding ask / use of funds - Jose Bethancourt - Co-Founder & CEO - Marco del Carmen - Co-Founder & CTO - Contact: jose@methodfi.com / methodfi.com --- ## Recommended financial model - **Archetype + why:** Usage-based / transaction-volume API revenue model (similar to Stripe/Plaid pricing). Revenue = transactions processed × price per transaction. MRR framing in the deck suggests possible monthly minimums or volume tiers layered on top. This is the correct archetype because the market-sizing equation in the deck itself is price-per-transaction × volume. - **Forecast horizon & granularity:** 3 years (Year 1 monthly, Years 2–3 quarterly). Early-stage with unclear revenue base warrants monthly granularity in Year 1 to capture ramp. - **Key drivers & assumptions:** | Driver | Value | Source | | -- | -- | -- | | Price per debt repayment | $0.65 | - | | US debt repayments / year (TAM volume) | 10B | - | | Live customers at launch | 4 | - | | Pipeline LOIs → MRR if converted | $250K MRR | - | | Actual current MRR | Redacted ($x) | - | | New customer adds per month (Year 1) | 2–4 | early-stage B2B fintech API ramp | | Average transactions per customer per month | 50,000 | mid-sized fintech app; no data in deck | | Revenue per customer per month | $32,500 | = 50K × $0.65 | | Gross margin | 70–80% | typical for API/payments infra; network/ACH costs deducted | | Churn (monthly) | 1.5% | B2B API, sticky once integrated | | S&M as % of revenue (Year 1) | 40% | early-stage sales-led motion | | R&D as % of revenue (Year 1) | 35% | API infra build-out | | G&A as % of revenue (Year 1) | 15% | lean team | | LOI conversion rate | 60% | LOIs are soft commitments; standard conversion | | LOI → live ramp (months) | 2–3 | API integration lead time | - **Scenarios (Base / Bull / Bear - which variables flex):** - Bear: LOI conversion 40%; avg transactions/customer 20K; price erosion to $0.50/txn - Base: LOI conversion 60%; avg transactions/customer 50K; $0.65/txn held - Bull: LOI conversion 80%; avg transactions/customer 150K; upsell to mortgage underwriting vertical at premium pricing - **Required sheets / outputs:** 1. Assumptions - all drivers in one place, clearly labeled vs 2. Customer model - cohort-based: new customers per period, active customers, churn, cumulative 3. Volume model - active customers × avg transactions/customer/month = total monthly transactions 4. Revenue - transactions × price/transaction; reconcile to MRR; include LOI pipeline conversion schedule 5. P&L (Income Statement) - Revenue → Gross Profit → EBITDA → Net Income; opex line items: S&M, R&D, G&A 6. Headcount plan - tied to opex (optional but useful at seed stage) 7. Cash flow & runway - burn rate, cash on hand (placeholder until funding ask is known) 8. Scenario toggle - dropdown switching Bear/Base/Bull across key volume and pricing drivers 9. Market penetration summary - actual volume vs 10B TAM, implied market share ## Frequently asked questions ### Is the Method Financial financial model free? Yes. The Method Financial model is a free Excel download with live formulas. ### Can I change the assumptions? Yes. The workbook is editable and its live formulas recalculate when assumptions change.