Hi there,
Welcome to the 58th edition of Heartcore Consumer Insights.
If you missed the past newsletters, you can catch up here. You can also follow us on Linkedin to get more consumer insights.
Now, let’s dive in!
Learnings from Wish growth team - Lenny Rachitsky (early Airbnb PM, now Angel investor & newsletter writer)
Wish has become the #1 shopping app in 40+ countries, is rumored to often be the #1 spender on FB and Google ads, sells +2M items on a daily basis.
Growth principles from its former Chief Growth Officer:
Be 100% data-driven: Wish's superpower is leaving no room for taste or opinion. The founder didn't plan to sell cheap goods to low-socioeconomic customers, but it is where the data took him. "Everyone is data-driven when it's convenient when it agrees with your opinions. Wish is great at ignoring its own emotions."
Have a differentiated approach: most of Wish’s initial sales came from places like Florida, Greater LA county, and middle-America. Later, Africa, Latin America, and Eastern Europe (average household income $18k/year). "Wish sales grew in cities everyone else ignored, we didn't care what our friends or VCs thought, we blindly listened to the data."
Think full-funnel: even though Wish grew primarily through paid ads, they recognized they also had a perception problem: the top Google search result for Wish was "Is Wish a scam?" so they invested in brand campaigns, partnering with respected brands. "The Lakers were the most prestigious sports brand in the world, and the greater LA area was Wish's top market. I did the deal the year they didn't make the playoffs, so it was priced low, and Magic promised me we'd get a big-time star next year...which turned out to be Lebron"
Hack the flywheel: Wish started as a free wishlisting product (get it?), and with that acquired a ton of free demand. They then went to the merchants of the most wish-listed products and offered this demand to them if they would sell their products on the platform. "Now with the supply, we raised a bunch of money and threw it at FB ads to sell out the supply. The merchants were happy, so we were able to acquire more supply, which helped convert demand at a higher rate, and the flywheel began."
NFTs and a Thousand True Fans - Chris Dixon (a16z Crypto GP)
In his classic 2008 essay “1000 True Fans” Kevin Kelly predicted that the internet would transform the economics of creative activities: Kelly’s vision was that the internet was the ultimate matchmaker, enabling 21st century patronage.
But the internet took a detour: centralized platforms became the dominant matchmaker, and used this power to insert ads and algorithmic recommendations.
The good news is that the internet is trending back to Kelly’s vision. Crypto, and specifically NFTs, can accelerate the trend of creators monetizing directly with their fans.
NFTs have received a lot of attention lately because of high sales volumes (in the past 30 days, there has been over $400M in NFT sales).
Three important reasons why NFTs offer fundamentally better economics for creators:
Removing rent-seeking intermediaries: there are and will continue to be NFT platforms and marketplaces, but they will be constrained in what they can charge because blockchain-based ownership shifts the power back to creators and users — you can shop around and force the marketplace to earn its fees.
Enabling granular price tiering: In ad-based models, revenue is generated more or less uniformly regardless of the fan’s enthusiasm level. As with Substack, NFTs allow the creator to “cream skim” the most passionate users. NFTs go farther than non-crypto products in that they are easily sliced and diced into a descending series of pricing tiers.
Making users owners, thereby reducing customer acquisition costs: the highest revenue NFT project to date, NBA Top Shot, has generated $200+M in gross sales in just the past month while spending very little on marketing. It’s been able to grow so efficiently because users feel like owners — they have skin in the game. It’s true P2P marketing, fueled by community, excitement, and ownership.
Clubhouse’s Inevitability
Diving into Oscar Health's S-1
How to Build a DTC Brand in 2021
Bessemer 2021 Healthcare Predictions
2021 Marketing Tools
A framework for evaluating consumer credit startups
User Owned Platforms
Coinbase Seed Round Pitch Deck
The rise of Meituan
🇪🇺 Notable European early-stage Consumer rounds :
TreeCard, a UK-based provider of a wooden Mastercard that channels profits from merchant surcharges into reforestation programs, raises $5.1M with EQT/Seedcamp/Episode 1 - link
Memmo, a Sweden-based platform that connects famous celebrities with their fans, raises $10M with Left Lane/FJ Labs - link
Cosi Group, a Germany-based startup offering an alternative to boutique hotels, raises $20 with Soravia/Cherry Ventures/e.ventures - link
Crisp, an Amsterdam-based online-only supermarket focused on fresh products, raises €30M with Target/Keen - link
Dream Games, a Turkey-based developer of puzzle games, raises $50M with Index/Balderton/Makers Fund - link
Flink, a Berlin-based on-demand grocery delivery startup, raises $52M with Target/Northzone/Cherry - link
🇺🇸 Notable US early-stage Consumer rounds :
Mentorcam, an L.A-based video messaging platform for consumer advice from experts, raises $1.4M with General Catalyst/Studio VC/Kosinski - link
Fuzzy, a San Francisco-based pet education and health membership platform, raises $18M with Greycroft/Crosscut /Matrix - link
Whatnot, an L.A.-based live streaming collectibles marketplace, raises $20M with a16z - link
Eco, an SF-based digital global cryptocurrency platform, raises $26M with a16z/Founders Fund/Activant/Slow/Valor - link
Neeva, a Mountainview-based maker of an ad-free search engine, raises $40M with Sequoia/Greylock - link
Belong, an SF-based residential network that vertically integrates all aspects of the home rental process, raises $40M with a16z/GGV/Battery - link
Tyto Care, an NYC-based provider of a home health diagnostic device and telemedicine consultation app, raises $50M with Insight/Olive Tree/Qualcomm - link
🔭 Notable later stage Consumer rounds :
M1 Finance, a Chicago-based company developing a money management platform, raises $75M with Coatue/Left Lane/Clocktower - link
Job&Talent, a Spain-based workforce marketplace for temporary roles, raises $119M with SoftBank - link
Vestiaire Collective, a France-based second-hand luxury fashion marketplace, raises €178M with Kering/Tiger Global - link
Rohlik Group, a Czech Republic-based online grocery business, raises $230M with Partech/Index/Quadrille - link
Instacart, an SF-based grocery delivery company, raises $265M with a16z/Sequoia /D1 - link
BlockFi, a Jersey city-based crypto lending platform, raises $350M with Bain Capital/DST/Pomp Investments/Tiger - link
Starling Bank, a UK-based challenger bank, raises $376M with Fidelity/Qatar Investment Authority/RPMI - link
🍭 Notable Consumer Exits
Square acquires Tidal for $300M. Tidal is an NYC-based subscription-based music & podcast streaming service, with backers including JayZ - link
Roblox files for IPO. Roblox is a US-based online gaming & development platform with backers including a16z/Greylock/Tiger Global/Index - link
We are thrilled to unveil our new website and branding.
Congrats to our portfolio company Italic for being named one of the 10 most innovative retail companies of 2021 by Fast Company!
Heartcore Consumer Insights is a weekly newsletter, covering notable consumer rounds and exits, as well as top content in the B2C space. Join us and spread the word!
