💡 Heartcore Consumer Insights

Edition #82

Hi there,

Welcome to the 82nd 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!

OpenSea: The Reasonable Revolutionary - Mario Gabriele

  • In early 2018, while at YC, the OpenSea co-founders decided to pivot and go all-in on building “a marketplace for the metaverse”. Given the paucity of NFTs created at that time, that didn’t look like a particularly exciting proposition. But the pair valued the novelty: "When you’re starting a project you’re looking for something that hasn't been done before. This hadn’t been done before."

  • At almost the exact same time as they made their pivot, another team had decided to build a solution in the space. And in many respects, they seemed like the better bet. Composed of four ex-Zynga employees, Rare Bits seemed to have the talent to capitalize on this new space. On the same day in February 2018, OpenSea and Rare Bits launched on Product Hunt:

  • Richard Chen summarized the consensus at the time: "Rare Bits was a much more polished team on paper – they were ex-Zynga and raised a lot more money than OpenSea from traditional VCs. However, the OpenSea team was more lean and scrappy. Devin and Alex did a great job living in Discords to discover new NFT projects and out hustled Rare Bits." By 2019, Rare Bits had seemingly closed shop.

  • When questioned about the platform’s grand vision, Finzer (CEO) demurs, stating that the focus is to “try to improve the core marketplace.” He is almost pathological in his humility. He is also extremely focused. One former employee referred to him as “one of the most focused founders in the entire crypto space."

  • Since its founding in 2017, the NFT marketplace has grown to become the undisputed leader in the space with a share that exceeds 97%, and volume 12x that of its closest rival. OpenSea alone is on track to surpass $20 billion in volume for 2021. In the blink of an eye, NFTs have matured from a nettlesome triviality to a strolling behemoth.

  • Whatever one’s position is on the space, these numbers illustrate that NFTs are far more than a trifling interest and that OpenSea is more than just a peddler of esoterica.

A Nu Dawn, A Nu Day - Inside Brazil’s Newest Big Bank - Marc Rubinstein

  • "In mid-2012, I entered the branch of one of Brazil’s largest banks to open my first bank account. As I approached the first bulletproof door that was flanked by armed security guards, I sensed this was not going to be easy. During the following four months, I spent long hours in queues, calling the call center, and returning to the bank branch with an increasing number of documents, until finally a bank account that would charge hundreds of reais per year in fees was approved in my name. As I tried to reconcile this experience with the immense profitability of Brazilian banks and the low penetration of banking in the country, I realized that this was possibly the entrepreneurship challenge I had been looking for…"

  • Nubank’s founding story shares many similarities with Tinkoff in Russia. Neither founder had a background in either banking or tech. And they each confronted a wall of skepticism when they laid out their plans. Vélez mentions: “I spent a lot of time talking to the experts, to the CEOs, to the consultants. The overall sense – their conclusion – was that it was impossible.”

  • Nu proved it wasn’t impossible, filing its prospectus ahead of a listing on the NYSE.

  • Vélez is a big proponent of the customer view. “There are a number of different things that we’re doing differently. But I would say the number one is having a culture that is obsessed with customers and doing the right thing for the customers, from doing the right decisions to giving the right customer service, to building products that are really actually good for them. I would say that's number one.”

  • Nu’s first product was a credit card in 2014. The company had raised $15M from Sequoia and Kaszek but was loath to spend it on marketing. Rather, a powerful customer referral program was built and helped keep customer acquisition costs very low. The company claims to have acquired 80-90% of its customers organically. In the first nine months of 2021, CACs were $5 per customer.

  • Nu works hard to make sure customers do stick around. In the first nine months of this year, it lost a (very low) average of 0.06% of its customers per month. In addition, it estimates that around half of those active customers who have been with the bank for more than a year use Nu as their primary bank.

  • Bringing it all together, Nu estimates that the value of a customer is equivalent to over 30x their acquisition cost. On the basis of the current customer acquisition cost, that makes each customer worth around $150 to Nu.

🇪🇺 Notable European early-stage Consumer rounds :

  • Picker, a Spain-based marketplace where users buy products based on other user recommendations, raises €2.1M from Luxor/btov - link

  • Oja, a London-based grocery delivery startup focusing on Nigerian, Ghanaian, and Jamaican food, raises $3.3M from LocalGlobe - link

  • Aktiia, a Switzerland-based maker of a wearable blood pressure monitoring system, raises $17.5M from Draper/Redalpine/415/Verve - link

🇺🇸 Notable US early-stage Consumer rounds :

  • Irrelevant Labs, a Sheridan-based AI and blockchain-based gaming company, raises an undisclosed amount from a16z - link

  • Irreverent Labs, a Seattle-based startup that builds blockchain-based games where users will be able to own characters that can be bought and sold, raises $5M from a16z - link

  • MilkRun, a Portland-based grocery staples subscription service, raises $6M from Spark Capital - link

  • Core Loop an S.F.-based game studio developing a sandbox massively multiplayer online game using blockchain technology, raises $12M from a16z - link

  • Signos, an S.F.-based app giving consumers real-time weight-loss advice based on their blood glucose levels, raises $13M from GV/Courtside Ventures - link

  • Goody,  a Miami-based maker of a personalized corporate and consumer gifting app, raises $15M from SoftBank - link

  • Talent Hack, an N.Y.-based platform for fitness creators, raises $17M from Emergence/GFC - link

  • Faraway, a Miami-based company enabling blockchain games with player-driven economies, raises $21M from Lightspeed/FTX - link

  • Sandbox VR, an S.F.-based location-based VR startup, raises $37M from a16z - link

  • Hallow, Chicago-based Catholic prayer and meditation app, raises $40M from Drive/Peter Thiel - link

🔭 Notable later stage Consumer rounds :

  • Gather, an S.F.-based virtual gathering startup, raises $50M from Sequoia/Index - link

  • Block Renovation, an N.Y.-based startup aiming to digitize and simplify the home renovation experience, raises $50M from SoftBank - link

  • Curated, an S.F.-based e-commerce platform that enables consumers to discover products online with the help of a passionate expert, raises $75M from CapitalG/Forerunner/Greylock - link

  • Daily Harvest, an N.Y.-based frozen food startup, raises $77M from Lone Pine - link

  • Jackpocket, an N.Y.-based state lottery app, raises $120M from Left Lane - link

  • Razor Group, a Germany-based platform for buying and scaling 3rd-party Amazon merchants, raises $125M from Fortress/468/Presight- link

  • Mythical Games, an L.A.-based NFT games startup, raises $150M from a16z/D1 /FTX/Binance - link

  • Papa, a Miami-based provider of care and companionship solutions to seniors, raises $150M from SoftBank/TCG/Tiger - link

  • GrubMarket, an S.F.-based food tech company, raises $200M from Tiger - link

  • Upgrade, an S.F.-based credit, and mobile banking company, raises $280M from Coatue/DST - link

  • Heyday, an S.F.-based company acquiring and scaling D2C brands on Amazon, raises $555M from Raine/Premji/General Catalyst - link

🍭 Notable Consumer Exits

  • Lemonade acquires Metromile for approx. $500M. Lemonade is an N.Y.-based insurtech - link

  • Allegro acquires Mall Group for $1Bn. Allegro is a Poland-based online retailer - link

  • A Blackstone-backed media company acquires Moonbug for $3Bn. Moonbug is a kid's entertainment content studio - link

  • DoorDash acquires Wolt for $7Bn. DoorDash is an S.F.-based restaurant delivery company - link

  • NerdWallet goes public via IPO. NerdWallet is a personal finance platform - link

  • Real Good Foods goes public via IPO. Real Good Foods is a maker of low-carb high-protein packaged foods - link

🖤 Heartcore

  • Congratulations to our portfolio company Neo4j for extending their Series F to $391M and welcoming ex-Google CFO and Twitter chairman Patrick Pichette to their board 🎉 - link

Heartcore Consumer Insights is a weekly newsletter covering notable consumer rounds and exits and top content in the B2C space.