✍️ WHAT CAUGHT OUR EYES
Fintech 2025: The Next Wave
When the bubble burst in 2000-2, there was a lot of thought put into what had worked and what hadn’t worked with Web 1.0.
Those insights formed the basis of the next wave of software companies (Web 2.0 / Social).
Similarly, some issues have plagued Fintech 1.0 and may instruct how to think about Fintech 2.0.
Interesting areas:
1. Beyond Millennials: For the last decade, a vast majority of consumer fintech startups have focused on millennials. Young people were the perfect market for new, unproven products. Young people are less tied to existing brands, more likely to be technophilic, and have simpler financial needs. As we enter the next decade, consumer acceptance of new financial products will continue to grow, leaving new demographics open to new services. These customer segments will be more competitive, but also potentially more valuable, as they collectively are much larger than the millennial market.
2. Single Player to Multiplayer: Traditional financial products are single-player, which makes sense since people tend to expect a high degree of privacy around their finances. Yet, multiplayer products are inherently viral and fundamentally stickier, leading to lower churn rates and higher lifetime values. One of the big shifts from Web 1.0 to Web 2.0 was designing products to be intrinsically multiplayer. This was one of the fundamental differences between the design of LinkedIn (Web 2.0) and Monster.com (Web 1.0).
3. Novel Products & Services: When web development began in the 1990s, most initial concepts were just moving existing services online. Mail-order catalogs already existed, but we put them online. Yellow pages already existed, but we put them online. There were a few novel products, but for the most part, we collectively just moved a lot of products into the cloud, with all the advantages that global reach & distribution brought. Fintech 1.0 has also mostly replicated existing products, however, one of the great opportunities in Fintech long-term is leveraging technology platforms and distribution to create products & services that were not viable, or even possible, in the physical world.
An introduction to Bilibili
What is Bilibili?
Grossly simplified, it's the Chinese equivalent of Youtube. Except it's not. It's like if Youtube, Twitch, Steam, Patreon, TokyoPop, and Netflix had a CRISPR-baby.
It is a Chinese video-sharing website, themed around animation, comics, and games, where users can submit, view & add overlaid commentary on videos.
Bilibili is an interesting example in intentional community cultivation, and as a latecomer to the streaming wars in China, its growth strategies and innovative business models are also a useful reference for second movers in established markets.
Bilibili's strategy and business model have the following logic: (a) entrenchment into the community, (b) owning the user, (c) effective monetization.
Stage 1: Entrenchment into the community by creating an in-group. Bilibili has an incredibly sticky community (chart below), and it does so by cultivating buy-in into an internet sub-culture that from the outside seems esoteric and bizarre. While videos are free to view on the platform, the registration process to be a commentator involves passing a 100 multi-choice questions test with at least 60 correct answers within an hour (!)
Stage 2: Owning the user by capturing a stage of life rather than a field of interest. Relative to western consumer tech companies, who tend to focus on “serving a function” as their core mission, Chinese companies tend to focus on “owning the user” as their core mission. Put another way; Bilibili wants to own the Chinese Gen Z population's attention through providing a comprehensive entertainment service rather than be the platform that caters for all Chinese UGC video needs. It's a strategy that's already bearing fruits - Bilibili has received $1.5bn + post-IPO strategic investment from Alibaba & Tencent - in spite of them already having video platform subsidiaries - indicating that Bilibili has a unique positioning in the ecosystem.
Stage 3: Effective monetization of the user while still retaining the other stakeholders. Unlike Youtube, Bilibili is not dependent on advertising. The most compelling reason for this is that Bilibili does not want to alienate the community as it pursues monetization. Value-added services is the fastest-growing revenue segment for Bilibili, at a whopping 171.9% increase YoY, the bulk of which is coming from membership fees that allow users to access premium content.
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👏 WHERE THE MONEY WENT
🇪🇺 Notable EU early stage Consumer rounds :
Kianava, a Germany-based full-stack chronic care provider, raises $1.5M with Speedinvest - link
GoStudent, an Austria-based digital tutoring platform, raises a €5M extension with Left Lane/DN - link
Tourlane, a Germany-based online travel-booking platform for multi-day tours, raises a $20M extension with Sequoia/Spark/DN/HV - link
Jeff, a Spain-based turnkey retail franchise business, raises $21M with All Iron/Alma Mundi/FJLabs -link
FirstVet, a Sweden-based startup that provides on-demand vet video consultations, raises $35M with Mubadala/Cathay - link
🇺🇸 Notable US early-stage Consumer rounds :
Cure Hydration, a US-based plant-based hydration brand, raises $2.6M with Lerer Hippeau - link
Hellosaurus, a US-based mobile kids entertainment and education app, raises $3.5M with General Catalyst - link
Superpeer, a US-based platform for scheduling one-on-one video-calls with experts, raises $8M with Acrew/Audacious/Homebrew/Moxxie - link
Obligo, a US-based deposit-free rental solution provider, raises $15.5M with 83North/10D/Entrée/Viola Credit - link
WithMe Health, a US-based medication guidance app, raises $20M with OMERS - link
Chipper Cash, a US-based cross-border payments startup operating in seven African countries, raises $30M with Ribbit - link
🔭 Notable later stage Consumer rounds :
Headway, a US-based platform to search for therapists accepting insurance payments, raises $26M with Thrive/GV/Accel/GFC/IA Ventures - link
Duolingo, a US-based language-learning platform, raises $35M with Durable/General Atlantic - link
Udemy, US-based online learning marketplace, raises $50M with Learn Capital - link
HungryPanda, a U.K.-based Asian food delivery startup, raises $70M with Kinnevik/83 North/Felix - link
VOI, a Sweden-based e-scooter startup, raises $160M with The Raine Group/VNV Global/Balderton/Creandum/Project A/Inbox - link
Current, a US-based challenger bank for teens, raises $131M with Tiger Global/Sapphire/Avenir - link
Heyday, a US-based acquirer and operator of Fulfillment by Amazon brands, raises $175M with General Catalyst/Khosla/Arbor - link
Hippo, a US-based home neo-insurer, raises $350M with Mitsui Sumitomo Insurance Co. Ltd. - link
🍭 Notable Consumer Exits
Roblox files for IPO. Roblox is a US-based online gaming software maker with backers including a16z/Greylock/Tiger Global/Index/Meritech/Atlos/FirstRound - link
Wish files for IPO. Wish is a US-based mobile affordable shopping platform, with backers including General Atlantic/Everbright/Temasek/DST/Founders Fund/GGV - link
Affirm files for IPO. Affirm is a US-based pay-now-buy-later solution for online shoppers with backers including Durable/Thrive/GIC/Morgan Stanley/Founders Fund/Spark/HVF - link
HelloFresh acquires Factor75 for $277M. Factor75 is a US-based provider of fully-prepared meals with backers including Marcy/Listen/Flow/Bluestein - link
🖤 - HEARTCORE
Thrilled to announce Finematter's launch - link
A dark kitchen brand among Paris' best Asian restaurants Yes, Taster's Out Fry - link
Much 🖤 from Heartcore