✍️ Heartcore Consumer Insights
Welcome to the 78th 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!
Acquisition: organic customer acquisition strategies are critical for CSS companies. Successful, new-age CSS enterprises leverage low-cost or free channels to find and attract customers. Organic or less invasive customer acquisition methods result in higher conversion and retention. Examples:
Apple legal case versus Epic: increased antitrust pressure on the US Congress, and in Asian countries and the EU, could see Apple proactively making changes to avoid courtrooms. CSS investors and entrepreneurs could see billions of dollars swing their way as Apple’s walled garden is showing cracks.
iOS 14: With the release of iOS 14, consumers are asked if apps can collect their data for tracking purposes. This change is widely expected to reduce consumer targeting efficiency and conversion rates, driving up customer acquisitions costs.
Debunking the issues of LTV: the traditional LTV formula assumes that all users eventually churn at an even percentage. It does not take into consideration factors such as upsells and re-subscriptions. Measurement solutions to get around this limitation: divide users into “locals” (true power users) vs “tourists” (anecdotal opportunistic users) cohorts by looking at engagement metrics. Estimate the value of “lifetime users” in the local cohort and then calculate each cohorts’ LTV. Focus on the acquisition of “locals” and optimize marketing, not for just sign-ups and ROAS, but for long-term usage.
Key CSS metrics and KPIs for founders & investors:
Top-line: can be measured through (a) cash bookings or (b) MRR), ARR, and GAAP revenue. Important to show continued efficient growth in top-line metrics
LTV/CAC ratio: investors are looking for retention of users AFTER the first pay period - typically the 3rd, 6th, or 12th month. High retention in those periods indicates that users are discovering the value in the service and are likely to be retained long-term. Exceptional CSS businesses renew 50%+ of each annual cohort and 40% of Year 2. CAC payback of <3 months is critical to counter the high churn of initial users. 50%+ of users coming through organic channels is generally considered great.
Gross margins: the type of service or content being provided can vary between CSS industries. For example, exercise apps develop fitness classes at a high cost while a hiking app may be leveraging user-generated content (UGC) to enhance its offering. Investors have been proven willing to pay up for CSS businesses leveraging UGC to provide a unique service.
Sorare, a blockchain-based fantasy football game, has raised a $680m Series B round led by SoftBank, which values the three-year-old French company at $4.3bn. It is the biggest Series B round in Europe to date.
Sorare has emerged as one of the leaders in the fantasy market. It focuses on fantasy football games using non-fungible player cards. You can buy a line-up of player cards - for example PSG’s Kylian MBappe as a forward, Bayern Munich’s Manuel Neuer for goal, and “play” your fantasy football team in matches against others to win prizes paid in cryptocurrency.
You can also buy and sell the player tokens as their value goes up and down. Pick up a token for a rookie player - like a 16-year-old Bellingham playing his debut season at Birmingham - cheaply and watch the value go up when he signs for Dortmund. Or conversely, watch the value of your token plummet as a player is injured.
Serious traders can make thousands of dollars from these trades, in much the same way a daytrader might from trading stocks or cryptocurrencies. A unique Cristiano Ronaldo token sold for $289k in March.
One of the reasons sports NFTs have become popular is because they allow football fans a new way to connect with clubs and participate in the sport, even when there isn’t a match on.
“It’s an amazing way to connect, for the fans, because, first of all, you own this collectible but it is also a way to access cool experiences. Owning the NFT can give you access to the training ground. Last week, the winners of one of our games won tickets to go to the Atletico Madrid-Barcelona game” - “I think this utility value is something that sets us apart in the NFT space.” Nicolas Julia (Sorare CEO)
"A sports-related game is a good way to really bring an understanding of NFTs to the mass market. Although NFTs have become popular in some art circles, the average person is still unlikely to be bidding on artwork by Beeple at a Christie’s auction. Sport, on the other hand, is highly accessible. What’s important for me is not explaining what an NFT is with buzzwords but for users to feel the benefits, to feel they truly own the game, that they can move and sell their assets. I want people to experience it” Nicolas Julia told Sifted.
Lab-grown meat is definitely going to be a thing
Sorare Seed Deck
The Latest Marketplace Trends - FJ Labs
NFTs and the Cryptoverse
The DTC reckoning that never came
VanMoof bike box story
Whatnot co-founder on what’s next for livestream shopping
Wave - Building a Cashless Africa
Beneficiaries of App Store Changes
🇪🇺 Notable European early-stage Consumer rounds :
🇺🇸 Notable US early-stage Consumer rounds :
🔭 Notable later stage Consumer rounds :
🍭 Notable Consumer Exits
We're super excited to announce our investment in Ukio’s $9M seed round, alongside Breega, Partech & Kima Ventures. People nowadays want more flexibility, more mobility, and more freedom with less physical assets that tie them down. This is why Stanley Fourteau and Jeremy Fourteau are building Ukio - a network of beautifully furnished, turnkey apartments available for monthly stays using a fully digitized customer experience from search to check out. Check them out here! They are starting with stays in Madrid, Barcelona, and Lisbon - and (way) more to come. Welcome to the Heartcore family ⚡️🖤
Heartcore Consumer Insights is a weekly newsletter covering notable consumer rounds and exits and top content in the B2C space.