diff --git a/packages/core/src/bind/connectFactoryObservable.test.tsx b/packages/core/src/bind/connectFactoryObservable.test.tsx
index 8ed18e5..f2df295 100644
--- a/packages/core/src/bind/connectFactoryObservable.test.tsx
+++ b/packages/core/src/bind/connectFactoryObservable.test.tsx
@@ -18,6 +18,7 @@ import {
   map,
   switchMapTo,
   first,
+  startWith,
 } from "rxjs/operators"
 import { FC, useState } from "react"
 import React from "react"
@@ -497,6 +498,27 @@ describe("connectFactoryObservable", () => {
       expect(errorCallback).not.toHaveBeenCalled()
     })
 
+    it("supports streams that emit functions", () => {
+      const values$ = new Subject<number>()
+
+      const [useFunction, function$] = bind(() =>
+        values$.pipe(
+          startWith(0),
+          map((value) => () => value),
+        ),
+      )
+      const subscription = function$().subscribe()
+
+      const { result } = renderHook(() => useFunction())
+
+      expect(result.current()).toBe(0)
+
+      values$.next(1)
+      expect(result.current()).toBe(1)
+
+      subscription.unsubscribe()
+    })
+
     it("if the observable hasn't emitted and a defaultValue is provided, it does not start suspense", () => {
       const number$ = new Subject<number>()
       const [useNumber] = bind(
diff --git a/packages/core/src/bind/connectObservable.test.tsx b/packages/core/src/bind/connectObservable.test.tsx
index d1c2064..30b2b3f 100644
--- a/packages/core/src/bind/connectObservable.test.tsx
+++ b/packages/core/src/bind/connectObservable.test.tsx
@@ -525,6 +525,27 @@ describe("connectObservable", () => {
     expect(errorCallback).not.toHaveBeenCalled()
   })
 
+  it("supports streams that emit functions", () => {
+    const values$ = new Subject<number>()
+
+    const [useFunction, function$] = bind(
+      values$.pipe(
+        startWith(0),
+        map((value) => () => value),
+      ),
+    )
+    const subscription = function$.subscribe()
+
+    const { result } = renderHook(() => useFunction())
+
+    expect(result.current()).toBe(0)
+
+    values$.next(1)
+    expect(result.current()).toBe(1)
+
+    subscription.unsubscribe()
+  })
+
   it("should throw an error when the stream does not have a subscription", () => {
     const [useValue] = bind(of("Hello"))
     const errorCallback = jest.fn()