Hi there,
Welcome to the 60th edition of Heartcore Consumer Insights. Curated with 🖤 every week by the Heartcore Team.
If you missed the past newsletters, you can catch up here. Now, let’s dive in!
The a16z Marketplace 100: 2021 - a16z Consumer Team
Key takeaways from the a16z Marketplace 100 (ranking of the largest consumer-facing marketplace startups):
Emerging trends:
(a) A number of freshmen center around travel - but not as we once knew it. Rising travel marketplaces are leaning into outdoor travel. The freshmen include a marketplace to book unique campsites (Tentrr), to travel in and park RVs (Harvest Hosts), and to discover “luxury” camping experiences (Glamping Hub).
(b) The year also ushered in a wave of new fashion marketplaces, including Curtsy, Depop, and Vestiaire Collective. As opposed to focusing on top brands and luxury labels (like the RealReal or Poshmark), the freshmen fashion marketplaces specialize in unique, pre-owned items.
(c) Mercato (#34) and Dumpling (#43) both match consumers with local grocery providers. Though online grocery shopping at large went mainstream this year, companies that combine local merchants and convenient delivery hit a sweet spot in customer demand.
Within the marketplace ecosystem, consumer spending is concentrated at the very top: one of the most striking results is Instacart’s impressive edge. The company accounts for more than 70% of GMV in the Marketplace 100 (for context, last year’s #1 marketplace, Airbnb, represented just over 30% of total GMV). Despite Instacart’s enormous scale, it was the 15th fastest growing marketplace of 2020!
COVID crushed some marketplace categories… and supercharged others: Childcare marketplaces shrunk 61%, ticketing marketplaces 52%, and office space marketplaces 30%. Inversely, the biggest upward leaps came from the remote learning marketplace Outschool, the celebrity engagement platform Cameo, the campsite connector Hipcamp, and the wholesale retail marketplace Faire.
Here are the top 10 largest marketplace startups and private companies in 2021:
The Power User Trap - Reforge
Most companies have an overly simplistic view of their Power Users, defining them as the most frequent users on their product.
Teams either over-optimize for them or neglect them, ultimately killing their products: this is the Power User Trap.
Over-optimizing for Power Users: product changes targeted at Power Users can make the product difficult, expensive, or too complex. Example: LinkedIn offers more products targeted at recruiting Power Users. As users' inboxes become cluttered with unwanted sales outreach, high-quality messages get lost in the noise.
Neglecting Your Power Users: attempts to make a product broadly accessible can degrade the elements that deliver value for Power Users, eventually driving them to seek alternatives. Example: in order to streamline its core offerings, Dropbox sunset its Carousel feature. Power Users of that feature began using Google Drive for tasks they previously did on Dropbox.
People fall into the trap for a few common reasons:
Relying on the Most Common Power User Definition: The most common way to define Power Users is by looking at the Power User Curve. While this can be the correct way to identify Power Users for some products, in many cases it is either: 1) too broad to be meaningful, or 2) too focused on usage frequency, so it omits important Power User types.
Stopping at One Power User: While only one persona may directly impact monetization, other Power User types may play a key role in generating PMF. Example: Tinder must keep two distinct groups of Power Users. The obvious Power User is the outlier in terms of engagement and spend. Yet, a second Power User type is essential for fueling Tinder's growth loops: users who are outliers in terms of receiving right swipes.
A new Power User definition can help you better identify the users who really matter for your product: “A Power User is an outlier in terms of their behavior and influence within your product ecosystem.”
The important thing to remember is that a power user can be an outlier on many types of behavior and influence (monetization, creation, feature engagement, audience growth, costs).
Good vs. Great Leaders
The Hut Group: how THG cracked DTC
Key Metrics to track for Consumer Apps and Networks
Adding Friction in Your Mobile-app
How Airbnb Created An SEO Moat That Seems Invincible
Discord exploring sale that could be worth more than $10 billion
How Clubhouse could fail
The Rise of Platform Brands
🇪🇺 Notable European early-stage Consumer rounds
Roadsurfer, a Germany-based camper rental company, raises €24M with HV & Heartcore 🖤 - link
SellerX, a Germany-based startup that buys and builds Amazon brands, raises €26M with 83North/Cherry/Felix - link
PlusDental, a Germany-based digital dentistry startup, raises €35M with Jebsen/HV - link
🇺🇸 Notable US early-stage Consumer rounds
Chums, an N.Y.C-based social shopping service that helps friends suggest products to their pals, raises $3.5M with Ludlow/Shrug/Contrary/Fuel - link
Lolli, an N.Y.C-based rewards company that gives users bitcoin as “cashback” when they shop, raises $5M with Seven Seven Six/Night Media - link
Edge Pathways, an N.Y.C-based STEM education platform, raises $8M with First Round/Emerge/Rethink - link
On Deck, an S.F-based provider of fellowship programs for tech entrepreneurs, raises $20M with Founders Fund – link
Holberton, an S.F-based software engineering education company, raises $20M with Redpoint/Pearson/Daphni/Reach - link
Opensea, an N.Y.C-based NFT marketplace, raises $23M with a16z - link
Neighbor, a Lehi-based self-storage marketplace, raises $53M with Fifth Wall/a16z - link
🔭 Notable later stage Consumer rounds
Meatable, a Netherlands-based cultured meat startup, raises $47M with Section 32/DSM/BlueYard/Agronomics - link
Casavo, an Italy-based i-Buyer, raises €50M with Exor Seeds/Greenoaks/Project A/Picus - link
Freetrade, a UK-based stock trading app, raises $69M with Lane Capital/L Catterton/Draper Esprit - link
Pacaso, an S.F-based platform for listing and buying second-hand homes, raises $75M with Greycroft/GFC/Acrew – link
Ginger, an S.F-based provider of online mental health services, raises $100M with Blackstone - link
Rec Room, a Seattle-based gaming platform for user-generated content, raises $100M with Sequoia/Index/Madrona - link
Gorillas, a Germany-based startup providing grocery delivery in minutes, raises $290M with Coatue/DST/Tencent - link
Getir, a Turkey-based startup providing rapid on-demand deliveries, raises $300M with Sequoia/Tiger - link
Blockchain.com, a UK-based firm that provides a variety of cryptocurrency services to retail and institutional clients, raises $300M with DST/Lightspeed/VY - link
Ro, an N.Y.C-based online pharmacy and health tech company, raises $500M with General Catalyst/FirstMark/Dragoneer/Seven Seven Six - link
GoPuff, a Philadelphia-based instant delivery platform for everyday items, raises $1.15bn with D1 - link
🍭 Notable Consumer Exits
Cazoo to go public via SPAC. Cazoo is a UK-based online used car marketplace with backers including Stride/dmg/Mubadala/D1/General Catalyst - link
ThredUp files for IPO. ThredUp is an Oakland-based online consignment store with backers including Trinity/Redpoint/Highland - link
Trustpilot files for IPO. Trustpilot is a Denmark-based independent review platform with backers including Seed Capital/Northzone/Index/Draper - link
Heartcore Consumer Insights is a weekly newsletter, covering notable consumer rounds and exits, as well as top content in the B2C space.
