Heartcore Consumer Insights 🚀

12/02/2021

✍️ WHAT CAUGHT OUR EYES

Thoughts on Consumer Fintech - Brandon Jacoby (Designer & Growth @CashApp)

  • Many consumer fintech products are moving in a similar direction today, developing a solution to a specific product vertical, then horizontally engaging their customers with a broader set of functionality.

  • In consumer fintech, “all roads lead to Rome”. Regardless of which road the user starts on, they end up in a similar spot.

  • Whether it’s Cash App’s P2P payment network, Robinhood’s commission-free trading, or Chime’s early direct deposit, they’ll eventually end up in Rome - surrounded by upsells for debit cards and checking accounts.

  • This shared model is no surprise. More often than not, these acquisition hooks share a common thread of a relatively low CAC, with the extended product offerings being highly monetizable.

  • There are two primary paths to being successful as one of these players: (a) build a viral acquisition hook, (b) build a well oiled cross-sell machine.

  • The real winners, of course, are the rare products that can accomplish both.

  • In the next few years, we’ll thus potentially see new themes emerge:

  1. Socially enabled: introducing organic growth in primarily utilitarian products is a challenge. Startups bringing social layers to their products will create an opportunity for viral network effects to be introduced. Some examples of this would be Public, introducing a social element to investing, or TabTab, a sharable spin on subscription payments.

  2. Highly curated: with countless ways to spend, save, move, and invest one's money, users are now being consumed by a state of analysis paralysis. Relying on intelligent advice to inform one’s decision and bundled solutions might become more & more attractive over time.

Explain it like I am 5: DeFi - Messari

  • A buzzword you’ll likely hear more in 2021 is DeFi.

  • DeFi is short for Decentralized Finance which refers to applications on public blockchains aiming to create financial services without centralized intermediaries.

  • With DeFi, closed financial systems can be transformed into an open financial economy based on open-source protocols that are more accessible, more transparent & with fewer intermediaries.

  • Since these new financial protocols utilize smart contracts, they are both programmable and interoperable (are built with similar technical standards that enable them to easily communicate with each other).

  • Examples of DeFi applications today:

  1. Lending/Borrowing: DeFi protocols give users the ability to borrow and lend their assets. Using DeFi protocols users can post a variety of assets as collateral and borrow other cryptoassets against them. Notable crypto lending and borrowing platforms: Maker, Aave, Compound.

  2. Decentralized exchanges: DEXs are P2P marketplaces that allow direct cryptocurrency exchanges between two interested parties. DEXs aim to solve problems that are inherent in centralized exchanges such as centralized custody of assets, geographic restrictions, and asset selection. Notable Decentralized Exchanges: Uniswap, 1inch, Sushiswap.

  3. Stablecoins: Stablecoins are cryptocurrencies that aim to be price stable with another asset (fiat currencies, other cryptocurrencies, or precious metals). Beyond price stability, stablecoins offer a borderless payments system that is faster, cheaper, and more secure than traditional networks like SWIFT. Notable stable coins: DAI, USDT, USDC.

  4. Synthetic assets: Synthetic assets are financial instruments that simulate the value of another asset. It is generally achieved through the use of price oracles which ensure the asset tracks its target value. Notable synthetic asset platforms: Synthetix, UMA.

  5. Derivatives: A derivative is a contract that derives its value from the performance of an underlying entity (can be an asset/index/interest rate). Although traction has still been limited so far relative to other DeFi protocols, volumes on derivative exchanges have increased tenfold over the course of 2020. Notable platforms: Hegic, Opyn, Synthetix, Perpetual Protocol.

TOP CONTENT:

👏 WHERE THE MONEY WENT

🇪🇺 Notable European early-stage Consumer rounds :

  • Mindstone, a UK-based online learning tool that helps users annotate the web, raises $2.2M with Moonfire/The Fund - link

  • Hoxton Farms, a UK-based animal-free fat producer, raises £2.7M with Founders Fund/Backed.VC - link

  • Cajoo, a France-based on-demand grocery delivery startup, raises €6M with Frst/XAnge - link

  • Beam, a France-based in-browser note-taking app, raises $9.5M with Pace - link

  • Powder, a France-based platform for sharing video game clips, raises $14M with Serena - link

  • Homa Games, a France-based mobile game company with tools for developers and in-house games, raises €15M with e.ventures/Idinvest - link

🇺🇸 Notable US early-stage Consumer rounds :

  • Latitude, a US-based game developer focused on games with infinite storylines, raises $3.3M with NFX - link

  • Goody, a US-based mobile app that lets users send gifts via text, raises $4M with Index/Quiet/Craft - link

  • Gowalla, a US-based augmented reality social app, raises $4M with GV/Spark - link

  • Bold, a US-based platform providing older adults with digital workout routines, raises $7M with a16z - link

  • Nerd Street Gamers, a US-based esports platform with physical esports training centers, raises $11.5M with Founders Fund - link

  • Yotta Savings, a US-based savings app rewarding with weekly prize drawings, raises $13.2M with Base10/YC/Slow - link

  • Plume, a US-based company for gender hormone replacement therapy, raises $14M with Craft/General Catalyst/Slow - link

  • SWORD, a US-based digital musculoskeletal therapy provider that pairs its members with a licensed physical therapist, raises $25M with Khosla/Founders Fund - link

  • Folx Health, a US-based company for gender hormone replacement therapy and LGBTQIA+ sexual health, raises $25M with Bessemer/Polaris/Define - link

  • Tovala, a US-based smart oven and meal kit service company, raises $30M with Left Lane - link

  • Mighty Houses, a US-based 3D house-printing company, raises $40M with Khosla - link

  • Literati, a US-based subscription-based book club service, raises $40M with Felicis/Founders Fund/General Catalyst - link

  • Valon, a US-based tech-enabled mortgage servicer, raises $50M with a16z - link

🔭 Notable later stage Consumer rounds :

  • Good Eggs, a US-based grocery delivery startup, raises $100M with Glade Brook/GV/Benchmark/Index - link

  • Divvy Homes, a US-based fractional home ownership startup, raises $110M with Tiger Global/GGV/a16z - link

  • Stash, a US-based banking, investment, and advice platform, raises $125M with Eldridge/T.Rowe Price/Goodwater - link

  • Branded Group, an acquirer of Amazon third-party private-label businesses, raises $150M with Target Global/Declaration/Tiger Global - link

  • Vivino, a Denmark-based wine recommendation and delivery app, raises $155M with Kinnevik/Sprints/GP Bullhound/Creandum -link

  • Thrasio, a US-based, acquirer of Amazon third-party private-label businesses raises $750M with Oaktree/Advent - link

  • Robinhood, a US-based commission-free investing company, raises $3.4Bn with existing investors Sequoia/Ribbit - link&link

🍭 Notable Consumer Exits

  • Asos acquires Topshop for $400M. Topshop is a UK-based clothing brand - link

  • Uber acquires Drizly for $1.1Bn. Drizly is a US-based wine and liquor delivery platform, with backers including Avenir/Tiger Global/Polaris - link

  • Oscar Health goes public via IPO. Oscar Health is a US-based health insurance startup - link

  • Coinbase goes public via DPO. Coinbase is a US-based digital currency wallet service that allows traders to buy and sell bitcoin with backers including Tiger Global/IVP/a16z - link

  • 23andMe goes public via SPAC. 23andMe is a US-based consumer genetic testing company, with backers including Sequoia/NewView - link

🖤 - HEARTCORE

Much 🖤 from Heartcore