Welcome to the 73rd 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!
Robinhood’s anticipated S-1 filing became public 2 weeks ago. Key takeaways:
On the user growth side, yes, while the growth of accounts was absolutely impressive (145% YoY) one of the most notable data points is that ~80% of new funded accounts in 2020 & 2021 joined the platform organically. Robinhood has obviously been in the press a lot these past couple of years, often for the wrong reasons, but in the end in this case, the adage about all press being good press has been true.
On the user engagement side, what is crazy is that Robinhood has the engagement levels of a top-tier social network. 98.3% of all funded accounts use the product monthly. The DAU/MAU ratio is ~47%. For context, the very best social networks tend to be in the 50-65% range.
On the unit economics side, CAC has continued to go down, and users are more active with more money in the accounts and the average revenue per user has gone up. The revenue payback period has gone from 13 months in 2019, to under 5 months in 2020 to likely ~3 months in Q1 of 2021, which is really impressive.
Robinhood’s crypto assets under custody have gone parabolic since 2019. It increased 8.5x in 2020 and has grown another 3.3x in Q1 of 2021. There was $88B of crypto trading volume on Robinhood. For context, Coinbase has 335B of total volume in the quarter, but only 101B from retail. One other tidbit worth highlighting is that for Q1 of 2021, 34% of Robinhood’s crypto revenue (and so ~6% of their total revenue) came from transactions on DOGE coin.
Brokerage Comps: only Fidelity and Schwab are larger, and Robinhood is growing accounts much faster. Robinhood also states that they believe that “close to 50% of all new retail funded accounts opened in the US from 2016 to 2021 were new accounts created on Robinhood”.
One last interesting part of Robinhood’s offering is that they are setting aside 20-35% of shares in the offering for retail investors who are Robinhood customers through Robinhood’s “IPO access” feature. Will be interesting to see how this plays out!
When raising money, investors are increasingly looking for your unique distribution advantage- how you get to your target market more cheaply and quickly than your competition.
7 types of distribution advantages:
Starting with a pre-existing audience: companies like Kylie Cosmetics (Kylie Jenner), Square (Jack Dorsey), Superhuman (Rahul Vohra), Goop (Gwyneth Paltrow), and Tesla (Elon Musk) springboarded off their founder’s pre-existing audience, giving them an immediate advantage.
Developing a unique viral loop: e.g Faire where the team found a way to incentive their supply to drive their demand, and their demand to drive their supply.
Being first on an emerging platform: Zynga and Facebook, Instagram and the iPhone, Pinduoduo and WeChat. So many companies broke out by riding the wave of new platforms.
Having a remarkable story: companies like Airbnb, Etsy, Zillow, TaskRabbit, and Instacart grew primarily through (free) PR and word of mouth. Why? They are each remarkable. Thus, reporters and people loved talking about them.
Starting with pre-existing strategic relationships: another huge advantage is having a lot of pre-existing connections with your target buyers. Basically, having warm intros vs. going cold. This is exactly why joining programs like YC can be so effective for B2B startups.
Closing early strategic partnerships: a few companies saw huge success in securing early strategic partnerships: Netflix made a deal with DVD manufacturers to insert flyers into DVD players, Kayak partnered with AOL, PayPal partnered with eBay.
Bringing extraordinary hustle: a final distribution advantage is simply making sh*t happen - no matter what. Tony Xu (DoorDash) personally delivered food. Travis Kalanick (Uber) handed out coupon codes at Caltrain stations etc.
56% of all web visits happen on a phone. Mobile landing pages tips.
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🇪🇺 Notable European early-stage Consumer rounds :
🇺🇸 Notable US early-stage Consumer rounds :
🔭 Notable later stage Consumer rounds :
🍭 Notable Consumer Exits
We’re thrilled to welcome Gourmey to the Heartcore family!
We love our portfolio company La Fourche's new look! The new identity is reinforcing the online sustainable food platform's three core pillars: accessibility, commitment, and pleasure - link
Heartcore Consumer Insights is a weekly newsletter covering notable consumer rounds and exits and top content in the B2C space.