✍️ WHAT CAUGHT OUR EYES
Strava’s Backstory
Strava is a company offering a digital platform that allows casual & professional athletes to track/upload/share their workout sessions.
In 1995, Strava's cofounders founded Kana Sports (Strava v.0). Yet, the technology was not sufficiently mature as there was no widespread availability of GPS devices, hence, athletes needed to enter their performance data manually.
Based on the founders’ interaction with several brands, they found a massive pain point: companies were overwhelmed with the increase in customer support requests compared to the pre-internet days. Kana Sports pivoted, and started to offer a customer relationship management software. The pair found product-market-fit, scaled the company fast, and eventually IPOed.
In 2007, the founding duo had still not given up on their original idea. The financial crisis was looming, which led them to initially bootstrap the company with a lean approach:
The co-founders applied the “come for the tool, stay for the network” framework. The idea is to initially attract users with a single-player tool and then, over time, get them to participate in a network. In Strava’s case, the single-player mode that helped drive early adoption was based on a desktop-only analytics tool that visualized the performance data collected by hardware devices.
They exclusively focused on the cycling community initially since a) cyclists tend to have a high willingness to spend on (expensive) equipment, b) Cycling is an inherently social sport, opening the door for early word-of-mouth adoption.
Segments (info on the difficulty of a certain climb) which were already helpful in a single-player experience, gained enormous popularity once leaderboards got increasingly filled by the efforts of other cyclists. Segments became one of the critical pillars of Strava’s push into social fitness.
While these features would have found some adoption in a desktop-only world, the launch of Strava’s first mobile app in 2011 was a game-changer: users could now seamlessly upload their data from their phone & engage in social interaction right after.
Strava then pulled 3 growth levers to further expand its user base:
Entry into adjacent verticals (most notably running) - transcending inherently limited hardware-centric players (Fitbit, Garmin) or brand-centric players (Adidas Runtastic, Nike Run Club).
Expansion of its TAM by addressing people with different motivations for doing sports. In the CEO’s words, Strava should cater to every “athlete ranging from gold medal winners to people running their first 5k”.
Geographic expansion. Strava has zero marginal costs of distribution. They thus methodically went after power users in all major cities to create "clubs" in local areas. The company now has 68M users worldwide, out of which 78% do not live in the US.
Strava’s growth journey is impressive: the company now adds over 2M additional users every month, and Strava’s users share roughly 20M activities per week. The company, backed by the likes of Sequoia or Madrone is now supposedly worth more than $1bn.
The Consumerization of Healthcare
One of the main barriers to the adoption of technology in the healthcare industry has been the challenge of getting distribution for new products and services.
The historical consumer mindset has been to follow providers and to think of healthcare not as something they choose to consume.
This has changed over the past decade. The evidence of this shift is clear in some of the recent success stories in healthcare technology entrepreneurship.
Livongo is a healthcare technology company that offers programs to enable those with chronic conditions to live healthier lives. Livongo went public in 2019. In its S-1 filing, there are over 50 uses of the word “consumer,” with Livongo repeatedly referring to its product as a “consumer-first experience.”. This strong consumer DNA has helped propel Livongo to a $18.5bn merger with Teladoc a few months ago - making it the 3rd biggest acquisition in the U.S. across all industries in 2020.
But Teladoc-Livongo is just one of several high profile healthcare technology success stories of the past year that put consumers at the center of the experience.
One Medical, a membership-based primary care platform, counts over 475k consumers as members today and IPO'd this year. GoodRx, another company that went public this year, taps into the dissatisfaction with healthcare’s price by offering a price comparison tool for prescription drugs.
Hims & Hers, a telehealth platform that enables consumers to get medication for various specialties, including sexual health & dermatology, is going public via a merger with SPAC by Oaktree.
From their announcement earlier this month. "The future of healthcare will be led by consumer brands that empower people and give them full control over their healthcare. A direct relationship with consumers is the most valuable component in the healthcare system."
In addition to policy and technology driving consumers to pay more attention than ever to healthcare, and to all the recent successes in the category, the single biggest accelerant to this trend for the next decade may be the pandemic that we’ve all been living through in 2020.
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👏 WHERE THE MONEY WENT
🇪🇺 Notable EU early stage Consumer rounds :
MindLabs, a UK-based app offering professional-led meditation and mindfulness sessions, raises £1.4M with Passion - link
LifeX, a Denmark-based co-living apartments operator, raises €6M with Founders/Cherry/Væksttfonden - link
Mine, an Israel/UK-based personal data ownership company, raises $9.5M with Gradient/e.ventures - link
Dance, a Germany-based e-bikes subscription company, raises €15M with HV - link
🇺🇸 Notable US early-stage Consumer rounds :
Shotcall, a US-based platform for e-sports fans to play games alongside their favorite players, raises $2.2M with Initial/New Stack/Lerer Hippeau - link
Steadily, a US-based landlord insurance startup, raises $3.8M with Matrix/SVAngel/NextCoast - link
Atmos, a US-based homebuilding startup, raises $4M with Khosla/JLL Spark - link
The Naked Market, a US-based healthy food maker, raises $6M with HV/BEB - link
Curve Health, a US-based senior care company, raises $6M with Lightspeed - link
Goodcover, a US-based renters insurance startup, raises $7.5M with Goodwater - link
Locker Room, a US-based app where fans join live conversations about sports, raises $9.3M with GV/Lightspeed - link
🔭 Notable later stage Consumer rounds :
Chowbus, a US-based Asian food delivery startup, raises $30M with Altos/Left Lane - link
Marshmallow, a UK-based online car insurance broker, raises $30M with undisclosed backers - link
Jiko, a US-based challenger bank, raises $40M with Upfront/Wafra - link
Tomo Networks, a US-based mortgage and transaction platform for both real estate agents and consumers, raises $40M with Ribbit Capital/Zigg/NFX - link
Lunar, a Denmark-based mobile neobank operating in the Nordics, raises €40M with Seed Capital/Greyhound - link
WHOOP, a US-based fitness recovery monitoring watch and software maker, raises $100M with IVP - link
GetYourGuide, a Germany-based startup providing a marketplace for booking tours and activities worldwide, raises €114M with Searchlight/SoftBank/KKR/Battery & Heartcore 🖤 - link
Honor, a US-based in-home care network for the elderly, raises $140M with Baillie Gifford/T. Rowe Price - link
Scopely, a US-based mobile gaming studio, raises $340M with Wellington/TSG/BlackRock/CPP - link
🍭 Notable Consumer Exits
Nestlé USA acquires Freshly for $1.5bn. Freshly is a US-based healthy meals delivery startup, with backers including Highland/White Star/Insight/Nestlé itself - link
The Oetker Group acquires Flaschenpost for €1Bn. Flaschenpost is a Germany-based drinks delivery startup with backers including TigerGlobal/Cherry/Vorwerk - link
🖤 - HEARTCORE
Congrats to GetYourGuide for raising a €114M convertible note!
We’re on the lookout for an Operations Support Coordinator. If you want to work closely with our COO, apply here! 👇
Much 🖤 from Heartcore